The neurodegenerative disease amyotrophic lateral sclerosis (ALS) results from the progressive loss of motoneurons, leading to death in a few years. Ciliary neurotrophic factor (CNTF), which decreases naturally occurring and axotomy-induced cell death, may result in slowing of motoneuron loss and has been evaluated as a treatment for ALS. Effective administration of this protein to motoneurons may be hampered by the exceedingly short half-life of CNTF, and the inability to deliver effective concentration into the central nervous system after systemic administration in vivo. The constitutive release of CNTF from genetically engineered cells may represent a solution to this delivery problem. In this work, baby hamster kidney (BHK) cells stably tranfected with a chimeric plasmid construct containing the gene for human or mouse CNTF were encapsulated in polymer fibers, which prevents immune rejection and allow long-term survival of the transplanted cells. In vitro bioassays show that the encapsulated transfected cells release bioactive CNTF. In vivo, systemic delivery of human and mouse CNTF from encapsulated cells was observed to rescue 26 and 27% more facial motoneurons, respectively, as compared to capsules containing parent BHK cells 1 wk postaxotomy in neonatal rats. With local application of CNTF on the nerve stump and by systemic delivery through repeated subcutaneous injections, 15 and 13% more rescue effects were observed. These data illustrate the potential of using encapsulated genetically engineered cells to continuously release CNTF to slow down motoneuron degeneration following axotomy and suggest that encapsulated cell delivery of neurotrophic factors may provide a general method for effective administration of therapeutic proteins for the treatment of neurodegenerative diseases.