The purpose of this study was to evaluate the effects of alginate composition on the neurotrophic factor release, viability, and proliferation of encapsulated neural stem cells (NSCs), as well as on the mechanical stability of the scaffold itself. Four compositions were tested: a high guluronic acid (68%) and a high mannuronic acid (54%) content alginate, with or without a poly-L-lysine (PLL) coating layer. Enzyme-linked immunosorbent assay was used to quantify the release of brain-derived neurotrophic factor, glial-derived neurotrophic factor, and nerve growth factor from the encapsulated cells. All three factors were detected from encapsulated cells only when a high L-guluronic acid alginate without PLL was used. Additionally, capsules with this composition remained intact more frequently when exposed to solutions of low osmolarity, potentially indicating superior mechanical stability. Alginate beads with a PLL-coated, high D-mannuronic acid composition were the most prone to breakage in the osmotic pressure test, and were too fragile for histology and proliferation assays after 1 week in vitro. NSCs survived and proliferated in the three remaining alginate compositions similarly over the 21-day study course irrespective of scaffold condition. NSC-seeded alginate beads with a high L-guluronic acid, non-PLL-coated composition may be useful in the repair of injured nervous tissue, where the mechanism is the secretion of neuroprotective factors. We verify the neuroprotective effects of medium conditioned by NSCseeded alginate beads on the serum withdrawal-mediated death of PC-12 cells here.