Alginate is widely used for encapsulation of cells. Alginate is a linear block copolymer consisting of mannuronic acid (M) and guluronic acid (G). It has been shown that enzymes known as C-5 epimerases convert M to G in the polymer chain, giving rise to novel alginates with tailored properties. One of these enzymes, AlgE4, converts M blocks into blocks of strictly alternating M and G. In this study we investigated how alginate epimerized by AlgE4 affected capsule properties such as stability and permeability. Inhomogeneous calcium-alginate gel beads were made with original and AlgE4-epimerized alginates of different origin. The epimerized alginates formed initially smaller alginate gels that showed increased resistance to osmotic swelling compared with the original nonmodified alginate samples. The permeability, measured as diffusion of immunoglobulin (Ig) G into Ca/Ba-alginate gel beads, was reduced by epimerization and further reduced by addition of poly-L-lysine (PLL). The osmotic stability of alginate-poly-D-lysine(PDL)-alginate capsules was enhanced by the use of epimerized alginate; indeed, stable capsules with low permeability to tumor necrosis factor (TNF) could be made with low PDL exposures. Finally, alginate with an alternating structure interacted more strongly with the alginate-PLL capsule than did alginate with a high content of M blocks or G blocks or than an alginate consisting mainly of M.