Advanced development of the hydrogel bacterial microchip (HBMChip) technique is proposed. The microchip represents an array of hemispherical gel elements 0.3-60 nl in volume attached to hydrophobic glass surface and containing live immobilized microbial cells. Separate gel elements contain each up to 10(5) cells and retain them inside even while the cells are dividing. Porous structure of the gel provides easy access of nutrients and tested substances to the immobilized cells. Optical signals from the cells are easily measurable and allow monitoring of intracellular metabolism using vital fluorescent stains or engineered constructs encoding bioluminescent or fluorescent reporters. Two possible application modes of the HBMChip have been investigated, i.e. the observation of bacteria and biosensing. The dynamics of nucleic acids synthesis in growing E. coli cells has been analyzed using vital fluorescent stain SYTO 9. A special function has been suggested for evaluation of the cell growth parameters. Biosensing properties of the HBMChip have been illustrated by quantitative analysis of antibiotics and the detection of sodium meta-arsenite.