The nematode Caenorhabditis elegans (C. elegans) has been widely used as a multicellular organism in developmental research due to its simplicity, short lifecycle, and its relevance to human genetics and biology. Droplet microfluidics is an attractive platform for the study of C. elegans in integrated mode with flexibility at the single animal resolution. However, it is still challenging to conduct the developmental study of worms within droplets initiating at the L1 larval stage, due to the small size, active movement, and the difficulty in achieving effective substance exchange within the droplets. Here, we present a multifunctional droplet microchip to address these issues and demonstrate the usefulness of this device for investigating post-embryonic development in individual C. elegans initiating at the larval L1 stage. The key components of this device consist of multiple functional units that enable parallel worm loading, droplet formation/trapping, and worm encapsulation in parallel. In particular, it exhibits superior functions in encapsulating and trapping individual larval L1 worms into droplets in a controlled way. Continuous food addition and expulsion of waste by mixing the static worm-in-droplet with moving medium plugs allows for the long-term culture of worms under a variety of conditions. We used this device to investigate the development processes of C. elegans in transgenic strains with deletion and overexpression of the hypoxia-inducible factor (HIF-1), a highly conserved transcript factor in regulating an organism's response to hypoxia. This microdevice may be a useful tool for the high throughput analysis of individual worms starting at the larval stage, and facilitates the study of developmental worms in response to multiple drugs or environmental toxins.