The goals of this study were to evaluate human retinal pigment epithelial cell line (ARPE-19) for cell encapsulation and to optimize the alginate-based microencapsulation. We used immortalized ARPE-19 cells and the transfected sub-line that expresses secreted alkaline phosphatase (SEAP) reporter enzyme. Alginate was cross-linked with different divalent cations (Ca(2+), Ba(2+), Sr(2+) and combination of Ca(2+) and Ba(2+)), coated first with poly-l-lysine (PLL), and then with alginate. Microcapsules with different pore sizes and stability were generated. The pore size of the microcapsules was assessed by the release of encapsulated fluorescein isothiocyanate (FITC)-dextrans. The viability of the cells in the microcapsules was studied in vitro by assessing the secretion rates of SEAP and oxygen consumption by the cells. The best microcapsule morphology, durability and cellular viability were obtained with alginate microcapsules that were cross-linked with Ca(2+) and Ba(2+) ions and then coated with PLL and alginate. Based on FITC-dextran release these microcapsules have porous wall that enables the rapid contents release. The ARPE-19 cells maintained viability in the Ca(2+) and Ba(2+) cross-linked microcapsules for at least 110 days. The alginate microcapsules cross-linked with Ca(2+) and Ba(2+) have sufficiently large pore size for prolonged cell viability and for the release of secreted SEAP model protein (Mw 50 kDa; radius of gyration of 3 nm). ARPE-19 cells show long-term viability and protein secretion within alginate microcapsules cross-linked with Ca(2+) and Ba(2+). This combination may be useful in cell therapy.