The potential clinical application of alginate cell microencapsulation has advanced enormously during the past decade. However, the 3D environment created by alginate beads does not mimic the natural extracellular matrix surrounding cells in vivo, responsible of cell survival and functionality. As one of the most frequent macromolecules present in the extracellular matrix is hyaluronic acid, we have formed hybrid beads with alginate and hyaluronic acid recreating a closer in vivo cell environment. Our results show that 1% alginate-0.25% hyaluronic acid microcapsules retain 1.5% alginate physicochemical properties. Moreover, mesenchymal stem cells encapsulated in these hybrid beads show enhanced viability therapeutic protein release and mesenchymal stem cells' potential to differentiate into chondrogenic lineage. Although future studies with additional proteins need to be done in order to approach even more the extracellular matrix features, we have shown that hyaluronic acid protects alginate encapsulated mesenchymal stem cells by providing a niche-like environment and remaining them competent as a sustainable drug delivery system.