Vascular endothelial growth factor (VEGF) promotes neurogenesis in the adult hippocampus, but the way in which this process occurs in the Alzheimer's disease (AD) brain is still unknown. We examined the proliferation of neuronal precursors with an ex vivo approach, using encapsulated VEGF secreting cells, in AβPP/PS1 mice, a mouse model of AD. Overexpression of VEGF and VEGF receptor flk-1 was observed in the cerebral cortex from VEGF microcapsules-treated AβPP/PS1 mice at 1, 3 and 6 months after VEGF-microcapsule implantation. Stereological counting of 5-bromodeoxyuridine positive cells revealed that encapsulated VEGF secreting cells significantly enhanced cellular proliferation in the hippocampal dentate gyrus (DG). The number of neuronal precursors in VEGF microcapsules-treated AβPP/PS1 mice was also greater, and this effect remains after 6 months. We also confirmed that encapsulated VEGF secreting cells also stimulated angiogenesis in the cerebral cortex and hippocampal dentate gyrus. In addition, we found that VEGF-microcapsule treatment was associated with a depressed expression and activity of acetylcholinesterase in the hippocampus of AβPP/PS1 mice, a similar pattern as first-line medications for the treatment of AD. We conclude that stereologically-implanted VEGF-microcapsules exert an acute and long-standing neurotrophic effects, and could be utilized to improve potential therapies to control the progression of AD.