Calcium-alginate hydrogel has been widely studied as a material for cell encapsulation for tissue engineering. At present, the effect that cells have on the degradation of alginate hydrogel is largely unknown. We have shown that fibroblasts encapsulated at a density of 7.5 × 105 cells ml1 in both 2% and 5% w/v alginate remain viable for at least 60 days. Rheological analysis was used to study how the mechanical properties exhibited by alginate hydrogel changed during 28 days in vitro culture. Alginate degradation was shown to occur throughout the study but was greatest within the first 7 days of culture for all samples, which correlated with a sharp release of calcium ions from the construct. Fibroblasts were shown to increase the rate of degradation during the first 7 days when compared with acellular samples in both 2% and 5% w/v gels, but after 28 days both acellular and cell-encapsulating samples retained disc-shaped morphologies and gel-like spectra. The results demonstrate that although at an early stage cells influence the mechanical properties of encapsulating alginate, over a longer period of culture, the hydrogels retain sufficient mechanical integrity to exhibit gel-like properties. This allows sustained immobilization of the cells at the desired location in vivo where they can produce extracellular matrix and growth factors to expedite the healing process.