Transplantation of Bcl-2-transduced human umbilical vein endothelial cells (ECs) in protein gels into the gastrocnemius muscle improves local reperfusion in immunodeficient mouse hosts with induced hind limb ischemia. We tested the hypothesis that incorporation of local, sustained growth factor delivery could enhance and accelerate this effect. Tissue engineering scaffolds often use synthetic polymers to enable controlled release of proteins, but most synthetic delivery systems have major limitations, most notably hydrophobicity and inefficient protein loading. Here, we report the development of a novel alginate-based delivery system for vascular endothelial growth factor-A₁₆₅ (VEGF) that exhibits superior loading efficiency and physical properties to previous systems in vitro. In vivo, VEGF released from alginate microparticles within protein gels was biologically active and, when combined with EC transplantation, led to increased survival of transplanted cells at 28 days. The composite graft described also improved early (14 days) tissue perfusion and late (28 days) muscle myoglobin expression, a sign of recovery from ischemia, compared with EC transplantation and VEGF delivery separately. We conclude that our improved approach to sustained VEGF delivery in tissue engineering is useful in vivo and that the integration of high efficiency protein delivery enhances the therapeutic effect of protein gel-based EC transplantation.—Jay, S. M., Shepherd, B. R., Bertram, J. P., Pober, J. S., Saltzman, W. M. Engineering of multifunctional gels integrating highly efficient growth factor delivery with endothelial cell transplantation.