Physical and cognitive disabilities are hallmarks of a variety of neurological diseases. Stem cell-based therapies are promising solutions to neuroprotect and repair the injured brain and overcome the limited capacity of the central nervous system to recover from damage. It is widely accepted that most benefits of different exogenously transplanted stem cells rely on the secretion of different factors and biomolecules that modulate inflammation, cell death and repair processes in the damaged host tissue. However, few cells survive in cerebral tissue after transplantation, diminishing the therapeutic efficacy. As general rule, cell encapsulation in natural and artificial polymers increases the in vivo engraftment of the transplanted cells. However, we have ignored the consequences of such encapsulation on the secretory activity of these cells. In this study, we investigated the biological compatibility between silk fibroin hydrogels and stem cells of mesenchymal origin, a cell population that has gained increasing attention and popularity in regenerative medicine. Although the survival of mesenchymal stem cells was not affected inside hydrogels, this biomaterial format caused adhesion and proliferation deficits and impaired secretion of several angiogenic, chemoattractant and neurogenic factors while concurrently potentiating the anti-inflammatory capacity of this cell population through a massive release of TGF-Beta-1. Our results set a milestone for the exploration of engineering polymers to modulate the secretory activity of stem cell-based therapies for neurological disorders.