There is significant interest in the development of tissue-engineered skin analogues, which replace both the dermal and the epidermal layer, without the use of animal or human derived products such as collagen or de-epidermalised dermis. In this study, we proposed that alginate hydrogel could be used to encapsulate fibroblasts and that keratinocytes could be cultured on the surface to form a bilayered structure, which could be used to deliver the co-culture to a wound bed, initially providing wound closure and eventually expediting the healing process. Encapsulation of fibroblasts in 2 and 5% w/v alginate hydrogel effectively inhibited their proliferation, whilst maintaining cell viability allowing keratinocytes to grow uninhibited by fibroblast overgrowth to produce a stratified epidermal layer. It was shown that the alginate degradation process was not influenced by the presence of fibroblasts within the hydrogel and that lowering the alginate concentration from 5 to 2% w/v increased the rate of degradation. Fibroblasts released from the scaffold were able to secrete extracellular matrix (ECM) and thus should replace the degrading scaffold with normal ECM following application to the wound site. These findings demonstrate that alginate hydrogel may be an effective delivery vehicle and scaffold for the healing of full-thickness skin wounds.