Stimuli-responsive textiles are a rapidly advancing class of functional fiber-based materials able to sense and adapt to environmental triggers. Within these enabling technologies hydrogels and microcapsules are very representative, both of which offer complementary mechanisms for moisture management, controlled release, and adaptive performance. Hydrogels provide soft, water-rich polymer networks with tunable swelling, permeability, and mechanical properties, while microcapsules offer protection and targeted delivery of active agents through engineered shell architectures. When integrated into fibrous networks, these systems can impart dynamic responses moisture, temperature, pH, mechanical stress, light, and chemical or biological agents. This review critically examines progress in the design, synthesis, and textile integration of hydrogel- and microcapsule-based systems, with particular emphasis on materials that exhibit true stimuli-responsive behavior rather than passive or extended-release functionality. Strategies for incorporating bulk hydrogels, micro- and nanogels, and stimuli-responsive microcapsules into fibers, yarns, and fabrics are discussed in addition to key application areas such as smart apparel, medical and hygienic textiles, controlled drug delivery, antimicrobial fabrics, and adaptive filtration media. Current challenges related to durability, washability, response kinetics, scalability, and sustainability are highlighted, while future research directions are proposed to advance the development of robust, intelligent textile systems at the nexus of soft matter science and fiber engineering.