Highly reproducible Nano-in-Micro constructs are fabricated to provide a well-defined and self-reporting biomimetic environment for hepatocytes. Based on a protein/hydrogel formulation with controlled shape, size and composition, the constructs enable efficient nutrient exchange and provide an adhesive 3D framework to cells. Co-encapsulation of hepatocytes and ratiometric optical nanosensors with pH sensitivity in the physiological range allows continuous monitoring of the microenvironment. The lobule-sized microbeads are fabricated using an automated droplet generator, Sphyga (Spherical Hydrogel Generator) combining alginate, collagen, decellularized hepatic tissue, pH-nanosensors and hepatocytes. The pH inside the Nano-in-Micro constructs is monitored during culture, while assaying media for hepatic function and vitality markers. Although the local pH changes by several units during bead fabrication, when encapsulated cells are most likely to undergo stress, it is stable and buffered by cell culture media thereafter. Albumin secretion and urea production are significantly higher in the microbeads compared with controls, indicating that the encapsulated Nano-in-Micro environment is conducive to enhanced hepatic function.