While microgels and nanogels are most commonly used for the delivery of hydrophilic therapeutics, the water-swollen structure, size, deformability, colloidal stability, functionality, and physicochemical tunability of microgels can also offer benefits for addressing many of the barriers of conventional vehicles for the delivery of hydrophobic therapeutics. In this review, we describe approaches for designing microgels with the potential to load and subsequently deliver hydrophobic drugs by creating compartmentalized microgels (e.g., core−shell structures), introducing hydrophobic domains in microgels, leveraging host−guest interactions, and/or applying "smart" environmentally responsive materials with switchable hydrophobicity. In particular, the challenge of promoting hydrophobic drug loading without compromising the inherent advantages of microgels as delivery vehicles and ensuring practically relevant release kinetics from such structures is highlighted, with an eye toward the practical translation of such vehicles to the clinic.