Plasma apolipoprotein E (apoE) is a 34-kDa polymorphic protein which has atheroprotective actions by clearing remnant lipoproteins and sequestering excess cellular cholesterol. Low or dysfunctional apoE is a risk factor for hyperlipidaemia and atherosclerosis, and for restenosis after angioplasty. Here, in short-term studies designed to establish proof-of-principle, we investigate whether encapsulated recombinant Chinese hamster ovary (CHO) cells can secrete wild-type apoE3 protein in vitro and then determine whether peritoneal implantation of the microcapsules into apoE-deficient (apoE(-/-)) mice reduces their hypercholesterolaemia. Recombinant CHO-E3 cells were encapsulated into either alginate poly-l-lysine or alginate polyethyleneimine/polybrene microspheres. After verifying stability and apoE3 secretion, the beads were then implanted into the peritoneal cavity of apoE(-/-) mice; levels of plasma apoE3, cholesterol and lipoproteins were monitored for up to 14 days post-implantation. Encapsulated CHO-E3 cells continued to secrete apoE3 protein throughout a 60-day study period in vitro, though levels declined after 14 days. This cell-derived apoE3 was biologically active. When conditioned medium from encapsulated CHO-E3 cells was incubated with cultured cells pre-labelled with [(3)H]-cholesterol, efflux of cholesterol was two to four times greater than with normal medium (at 8 h, for example, 7.4+/-0.3% vs. 2.4+/-0.2% of cellular cholesterol; P<0.001). Moreover, when secreted apoE3 was injected intraperitoneally into apoE(-/-) mice, apoE3 was detected in plasma and the hyperlipidaemia improved. Similarly, when alginate polyethyleneimine/polybrene capsules were implanted into the peritoneum of apoE(-/-) mice, apoE3 was secreted into plasma and at 7 days total cholesterol was reduced, while atheroprotective high-density lipoprotein (HDL) increased. In a second study, apoE was detectable in plasma of five mice treated with alginate poly-l-lysine beads, 4 and 7 days post-implantation, though not at day 14. Furthermore, their hypercholesterolaemia was reduced, while HDL was clearly elevated in all mice at days 4 and 7 (from 18.4+/-6.2% of total lipoproteins to 31.1+/-6.8% at 7 days; P<0.001); however, these had rebounded by day 14, possibly due to the emergence of anti-apoE antibodies. We conclude that microencapsulated apoE-secreting cells have the potential to ameliorate the hyperlipidaemia of apoE deficiency, but that the technology must be improved to become a feasible therapeutic to treat atherosclerosis.