The present study investigates the respective roles of both the host immune response and the metabolic requirements in determining the long-term survival of erythropoietin-secreting myoblasts within encapsulating polymer membranes. Hollow-fiber capsules loaded with a high density of erythropoietin-secreting C(2)C(12) myoblasts survived poorly in the subcutaneous tissue of syngeneic mice, inducing variable hematocrit responses. To determine the role and the nature of the host response, recipients were treated with anti-inflammatory (diclofenac) and immunosuppressive (dexamethasone, FK506) agents. Only immunosuppressive drugs led to improved graft survival after 5 weeks of implantation, indicating an immune process as the cause of cell death. Furthermore, transient blocking of this process allowed long-term preservation of the implanted cells (> 100 days). The formation of necrotic cell cores inside densely packed devices elicited a local chronic inflammatory reaction. Hence, implants were designed to limit early cell death by inserting a supporting matrix and decreasing the number of loaded cells. The most efficient erythropoietin delivery was obtained with matrix-containing capsules that had received the lowest myoblast density. These results highlight the critical role of initial engraftment in the long-term acceptance of encapsulated myoblasts and the need to limit early cell death in the device to prevent subsequent host immuno-inflammatory responses.