The design of new materials to treat diseases linked with protein or hormone deficiency is a great challenge since the devices in their final shape as well as the reagents they are composed of have to be inert toward entrapped cells but also fully biocompatible with the host organism. Furthermore, the porosity of these materials has to be large enough to allow the diffusion of nutrients and metabolites while ensuring a perfect immune-isolation. The current work investigates the in vivo biocompatibility of a new robust alginate-titania hybrid microcapsule (alginate@TiO2) and the immune-isolation of entrapped living HepG2 model cells in order to assess the potentiality of this material as an artificial organ and device for cell therapy. A comparison was made with alginate-silica/alginate beads (ASA). The two types of material, with or without entrapped HepG2 cells, have been implanted subcutaneously in female Wistar rats for respectively 2 days and 2 months in order to evaluate short and long-term inflammatory responses by histological examination of the implants as well as of the muscles and subcutaneous tissues surrounding them. The presence of inflammation was also monitored by assaying the concentration of IL-6 in plasma and of MCP-1 in tissues in contact with beads or capsules. Immune-isolation of entrapped HepG2 cells was checked by assessment of their morphology, membrane integrity and intracellular enzymatic activity. The results suggest few differences in biocompatibility between ASA beads and alginate@TiO2 microcapsules as very little differences were observed with control animals. However, immune-isolation seemed to be better in the case of alginate-titania material as there were more encapsulated cells that remained alive 2 days post-implantation. The present study demonstrates that hybrid alginate@TiO2 microcapsules could be an adapted robust and fully biocompatible implantation material for the treatment of human disorders such as hormone deficiencies.