We developed a novel hybrid cell reactor system via functional fusion of single Escherichia coli protoplast cells, that are deficient in cell wall and expose plasma membrane, with arrayed lipid bilayer chambers on a device in order to incorporate the full set of cytosolic and membrane constituents into the artificial chambers. We investigated gene expression activity to represent the viability of the hybrid cell reactors: over 20% of hybrid cells showed gene expression activity from plasmid or mRNA. This suggests that the hybrid cell reactors retained fundamental activity of genetic information transduction. To expand the applicability of the hybrid cell reactors, we also developed the E. coli-in-E. coli cytoplasm system as an artificial parasitism system. Over 30% of encapsulated E. coli cells exhibited normal cell division, showing that hybrid cells can accommodate and cultivate living cells. This novel artificial cell reactor technology would enable unique approaches for synthetic cell researches such as reconstruction of living cell, artificial parasitism/symbiosis system, or physical simulation to test functionality of synthetic genome.