Capsules have been prepared based on a polyanion blend of sodium alginate and sodium cellulose sulphate, gelled in the presence of calcium chloride and sodium chloride. In a second step a membrane was formed via the addition of polymethylene-co-guanidine (PMCG), an oligocation. A mechanistic study examined the influences of pH, ionic strenght, gelation and reaction times as well as the molar mass of the polyanions on the transport and mechanical properties. The ratio of alginate-to-cellulose sulphate in the polyanion blend was also varied and it was found that both mechanical resistance to compression as well as the pore size of the membrane decreased as the percentage of cellulose sulphate was reduced. The maximum mechanical strength was observed to correspond to the minimum in viscosity of the polyanion blend with, for low NaCl levels, a 3:1 alginate: cellulose sulphate level providing the largest resistance to deformation. The ability to decouple the molar mass cut-off and mechanical resistance is viewed as an important advantage of alginate/cellulose sulphate/PMCG capsules. Capsules were transplanted into mice to a maximum of 102 days, after which animals were sacrificed and capsules retrieved. Over 90% of the capsules were recovered from the peritoneal cavity with the mechanical properties of the explanted capsules observed to decrease as a function of implantation time, likely as a result of ion exchange. The capsules were, however, relatively free from any rejection which is a quite unusual result for cation containing systems. It is believed that the reason PMCG-based microcapsules function well in vivo is that they provide a net negative charge on the surface. Higher molar mass polycations such as poly-L-lysine provide a net positive charge, inducing inflammation.