Poor graft survival limits the use of primary dopaminergic neurons for neural repair in Parkinson's disease. Injectable hydrogels have the potential to significantly improve the outcome of such reparative approaches by providing a physical matrix for cell encapsulation which can be further enriched with pro-survival factors. Therefore, this study sought to determine the survival and efficacy of primary dopaminergic grafts after intra-striatal delivery in a glial-derived neurotrophic factor (GDNF)-loaded collagen hydrogel in a rat model of Parkinson's disease. After intra-striatal transplantation into the lesioned striatum, the GDNF-enriched collagen hydrogel significantly improved the survival of dopaminergic neurons in the graft (5-fold), increased their capacity for striatal re-innervation (3-fold), and enhanced their functional efficacy. Additional studies suggested that this was due to the hydrogel's ability to retain GDNF in the microenvironment of the graft, and to protect the transplanted cells from the host immune response. In conclusion, the encapsulation of dopaminergic neurons in a GDNF-loaded hydrogel dramatically increased their survival and function, providing further evidence of the potential of biomaterials for neural transplantation and brain repair in neurodegenerative diseases such as Parkinson's disease.