In this study, we report the application of a biocompatible thermo-reversible hydrogel, made from thermo-sensitive poly(N- isopropylacrylamide-co-acrylic acid) (P(NIPAM-AA)) microgels, for expanding stem cells in three-dimensions (3-D). The P(NIPAM-AA) microgels were synthesized by emulsion polymerization with their thermo-responsive phase transition behaviors being examined by light scattering and rheological methods. The viability of the microgel-exposed C3H/10T1/2 cells compared to the control cells is close to 100%, indicating the non-cytotoxicity of the synthesized microgels. At 37 °C, rheological measurements reveal the formation of hydrogels from 30 mg mL-1 microgel dispersions. The cross-sectional morphologies of the hydrogels show the interconnected porous structure. The 3-D stem cell culture system can be achieved by heating the microgel and cell mixtures to 37 °C. The increase of the viable stem cells cultured suggests that the in situ formed hydrogels support stem cell proliferation. The recovery of the 3-D cultured stem cells can be easily accomplished by cooling the culture system to room temperature. The released 3-D cultured cells can further adhere to a 2-D substrate, implying that the cultured stem cells are not only alive, but also retain the capability of migration. Therefore, the in situ formed thermo-reversible P(NIPAM-AA) hydrogels can be employed to expand stem cells in 3-D for further applications in tissue engineering.