Aggregates (spheroids) of specific cells are often regarded as a better form in artificial organs and mammalian cell bioreactors for improved cell-specific functions. Freshly harvested primary rat hepatocytes, cultivated as spheroids and entrapped in an adhesion molecules of Arg-Gly-Asp (RGD)-conjugated extracellular matrix, have been examined for differentiated morphology and enhanced liver-specific functions. A copolymer of RGD conjugated p(NiPAAm-co-PEG) hydrogel was used to entrap hepatocytes in the forms of spheroids. Over 28 days, entrapped the spheroids had a higher viability and produced albumin and urea at constant rates, while there was slight increase in cell numbers and reduction of albumin secretion in single cell culture in the hydrogel. Hepatocytes cultured in this way are a potentially useful three-dimensional cell system for application in a bioartificial liver device and bioreactor.