Alginates are the most employed biomaterials for cell encapsulation due to their abundance, easy gelling properties and apparent biocompatibility. However, as natural polymers different impurities including endotoxins, proteins and polyphenols can be found in their composition. Several purification protocols as well as different batteries of assays to prove the biocompatibility of the alginates in vitro have been recently developed. However, little is known about how the use of alginates with different purity grade may affect the host immune response after their implantation in vivo. The present paper investigates the long-term functionality and biocompatibility of murine erythropoietin (EPO) secreting C2C12 cells entrapped in microcapsules elaborated with alginates with different properties (purity, composition and viscosity). Results showed that independently of the alginate type employed, the animals presented elevated hematocrit levels until day 130, remaining at values between 70-87%. However, histological analysis of the explanted devices showed higher overgrowth around non-biomedical grade alginate microcapsules which could be directly related with higher impurity content of this type of alginate. Although EPO delivery may be limited by the formation of a fibrotic layer around non-biomedical grade alginate microcapsules, the high EPO secretion of the encapsulated cells together with the pharmacodynamic behaviour and the angiogenic and immune-modulatory properties of EPO result in no direct correlation between the biocompatibility of the alginate and the therapeutic response obtained.