BACKGROUND: Monoclonal antibodies and antibody fragments are powerful biotherapeutics for various debilitating diseases. However, high production costs, functional limitations such as inadequate pharmacokinetics and tissue accessibility are the current principal disadvantages for broadening their use in clinic. METHODOLOGY AND PRINCIPAL FINDINGS: We report a novel method for the long-term delivery of antibody fragments. We designed an allogenous immunoisolated implant consisting of polymer encapsulated myoblasts engineered to chronically release scFv antibodies targeted against the N-terminus of the Aβ peptide. Following a 6-month intracerebral therapy we observed a significant reduction of the production and aggregation of the Aβ peptide in the APP23 transgenic mouse model of Alzheimer's disease. In addition, functional assessment showed prevention of behavioral deficits related to anxiety and memory traits. CONCLUSIONS AND SIGNIFICANCE: The chronic local release of antibodies using immunoisolated polymer cell implants represents an alternative passive vaccination strategy in Alzheimer's disease. This novel technique could potentially benefit other diseases presently treated by local and systemic antibody administration.