Continuous delivery of proteins by engineered cells encapsu-lated in biocompatible polymeric microcapsules is of considerable therapeutic potential. However, this technology has not lived up to expectations due to inadequate cell--matrix interactions and subsequent cell death. In this study we hypoth-esize that the presence of fibronectin in an alginate matrix may enhance the viability and functionality of encapsulated human cord blood-derived mesenchymal stromal cells (MSCs) expressing the human Factor IX (FIX) gene. MSCs were encapsulated in alginate-PLL microcapsules containing 10, 100, or 500 μg/ml fibronectin to ameliorate cell survival. MSCs in microcapsules with 100 and 500 μg/ml fibronectin demonstrated improved cell viability and proliferation and higher FIX secretion compared to MSCs in non-supplemented microcapsules. In contrast, 10 μg/ml fibronectin did not significantly affect the viability and protein secretion from the encapsulated cells. Differentiation studies demonstrated osteogenic (but not chondrogenic or adipogenic) differentiation capability and efficient FIX secretion of the enclosed MSCs in the fibronectin-alginate suspension culture. Thus, the use of recombinant MSCs encapsulated in fibronectin-alginate microcapsules in basal or osteogenic cultures may be of practical use in the treatment of hemophilia B.