Phosphorylation of alginate was achieved using a heterogeneous urea/phosphate reaction. The degree and stereoselectivity of phosphorylation as well as the effects on the physical properties of the polysaccharide were investigated by Fourier transform infrared (FTIR) and nuclear magnetic resonance (NMR) spectroscopies, inductively coupled plasma optical-emission spectroscopy (ICP-OES), and size exclusion chromatography (SEC). Multidimensional NMR studies of the phosporylated alginate revealed that phosphorylation of the M residues occurred predominantly at the C3 (equatorial) carbon of the polysaccharide ring. In addition, a more comprehensive assignment of the 1H NMR spectrum of alginate, compared with those previously reported in the literature, is provided here. Hydrogel materials were formed from ionically cross-linked blends of phosphorylated alginate and alginate. These blended hydrogels showed an enhanced resistance to degradation by chelating agents compared with cross-linked alginate hydrogels and a reduction in their mineralization potential.