This study demonstrated the fabrication of alginate microfibers using a modular microfluidic system for magnetic-responsive controlled drug release and cell culture. A novel two-dimensional fluid-focusing technique with multi-inlets and junctions was used to spatiotemporally control the continuous laminar flow of alginate solutions. The diameter of the manufactured microfibers, which ranged from 211 μm to 364 μm, could be well controlled by changing the flow rate of the continuous phase. While the model drug, diclofenac, was encapsulated into microfibers, the drug release profile exhibited the characteristic of a proper and steady release. Furthermore, the diclofenac release kinetics from the magnetic iron oxide-loaded microfibers could be controlled externally, allowing for a rapid drug release by applying a magnetic force. In addition, the successful culture of glioblastoma multiforme cells in the microfibers demonstrated a good structural integrity and environment to grow cells that could be applied in drug screening for targeting cancer cells. The proposed microfluidic system has the advantages of ease of fabrication, simplicity, and a fast and low-cost process that is capable of generating functional microfibers with the potential for biomedical applications, such as drug controlled release and cell culture.