Purpose Peri-implantitis is one of the most common inflammatory complications in dental implantology. Similar to periodontitis, in peri-implantitis, destructive inflammatory changes take place in the tissues surrounding a dental implant. Bacterial flora at the failing implant sites resemble the pathogens in periodontal disease and consist of Gram-negative anaerobic bacteria including Aggregatibacter actinomycetemcomitans (Aa). Here we demonstrate the effectiveness of a silver lactate (SL)-containing RGD-coupled alginate hydrogel scaffold as a promising stem cell delivery vehicle with antimicrobial properties. Materials and Methods Gingival mesenchymal stem cells (GMSCs) or human bone marrow mesenchymal stem cells (hBMMSCs) were encapsulated in SL-loaded alginate hydrogel microspheres. Stem cell viability, proliferation, and osteo-differentiation capacity were analyzed. Results Our results showed that SL exhibited antimicrobial properties against Aa in a dose-dependent manner, with 0.50 mg/ml showing the greatest antimicrobial properties while still maintaining cell viability. At this concentration, SL-containing alginate hydrogel was able to inhibit Aa on the surface of Ti discs and significantly reduce the bacterial load in Aa suspensions. Silver ions were effectively released from the SL-loaded alginate microspheres for up to 2 weeks. Osteogenic differentiation of GMSCs and hBMMSCs encapsulated in the SL-loaded alginate microspheres were confirmed by the intense mineral matrix deposition and high expression of osteogenesis-related genes. Conclusion Taken together, our findings confirm that GMSCs encapsulated in RGD-modified alginate hydrogel containing SL show promise for bone tissue engineering with antimicrobial properties against Aa bacteria in vitro.