Sprouting and induced glucoside alkaloids are commonly occurring, which are the main challenges in the storage of potato tubers (Solanum tuberosum). Essential oils are developed to inhibit potato sprouting, but their high volatility and instability limit their application. In this study, citronella essential oil (CEO) hydrogels were prepared by the ionic gelation method to enhance the sprout inhibition effect. The optimal conditions for the preparation of CEO hydrogels were: sodium alginate (SA) concentration of 1.56%, CaCl2 concentration of 2.26%, core-to-wall ratio of 2.02:1, and Tween-80 concentration of 0.15%. The SEM, FT-IR, XRD, and DSC images demonstrated that the CEO had been successfully encapsulated in hydrogels with improved thermal stability. CEO hydrogels could be released slowly within 1 week to achieve continuous sprouting inhibition. At 16 d of storage at 25 ℃, the sprouting rate of the CEO hydrogel-treated group was 42.06%, while that of the CK group was 100.00%; and at 180 d of storage at 3 ℃, the sprouting rate was 10.83%, while that of the CK group was 58.33%. The potato tubers treated with CEO hydrogel at either 3 ℃ or 25 ℃ maintained better quality. This indicated that CEO hydrogel can be used as a new potential potato sprout inhibitor in potato tubers.