Up to present, many advantages have been achieved in the field of cell-based therapies by applying sophisticated methodologies and delivery approaches. Microcapsules are capable to provide safe microenvironment for cells during transplantation in a simulated physiological 3D milieu. Here, we aimed to investigate the effect of alginate-gelatin encapsulation on angiogenic behavior of human endothelial cells over a period of 5 days. Human umbilical vein endothelial cells were encapsulated by alginate-gelatin substrate and incubated for 5 days. MTT and autophagy PCR array analysis were used to monitor cell survival rate. For in vitro angiogenesis analysis, cell distribution of Tie-1, Tie-2, VEGFR-1, and VEGFR-2 were detected by ELISA. In addition to in vitro tubulogenesis assay, we monitored the expression of VE-cadherin by Western blotting. The migration capacity of encapsulated HUVECs was studied by measuring MMP-2 and MMP-9 via gelatin zymography. The in vivo angiogenic potential of encapsulated HUVECs was analyzed in immune-compromised mouse implant model during 7 days post-transplantation. We demonstrated that encapsulation promoted HUVECs cell survival and proliferation. Compared to control, no significant differences were observed in autophagic status of encapsulated cells (p>0.05). The level of Tie-1, Tie-2, VEGFR-1, and VEGFR-2 were increased, but did not reach to significant levels. Encapsulation decreased MMP-2, -9 activity and increased the VE-cadherin level in enclosed cells (p<0.05). Moreover, an enhanced in vivo angiogenic response of encapsulated HUVECs was evident as compared to non-capsulated cells (p<0.05). These observations suggest that alginate-gelatin encapsulation can induce angiogenic response in in vivo and in vitro conditions.