1. FABp4 ctr E-MSCs 0 10 20 30 AU OC ctrE-MSCs 0 10 20 30 AU Col2a1 ctr E-MSCs 0 10 20 30 AU AB C controlE-MSCs 7dcontrolE-MSCs 7d Figure 1S Multipotency and differentiation capacity of E-MSCs is preserved. Staining with Alizarin Red for osteoblasts (A) or Oil Red O for adipocytes (B) of control MSCs or E-MSCs retrieved from capsules 7 days post encapsulation (E-MSCs 7d) and induced to differentiate, scale bars 500  m and 30  m respectively. C) mRNA expression of differentiation-related genes, such as fatty acid binding protein 4 (FABP4), Osteocalcin (OC) and Collagen2a1 (Col2a1) was measured by quantitative real-time PCR in control (monolayer culture) vs. E-MSCs 7d decapsulated cells. Encapsulated MSCs 1 month after subcutaneous injection in naïve mice : D) a representative image of capsules stained with FDA viability assay (scale bar 200  m); E) expression of differentiation-related mRNAs of encapsulated MSCs in comparison with control MSCs (monolayer culture). FABp4 ctr E-MSCs 0 10 20 30 AU OC ctrE-MSCs 0 10 20 30 AU Col2a1 ctrE-MSCs 0 10 20 30 AU E D Fluorescein / PI 9

2. CCL8 syn ctrGVHD+ E-MSCs 0 1000 2000 3000 4000 ng/ml sTNFr1 syn ctrGVHD+ E-MSCs 0.0 1.0 2.0 3.0 4.0 5.0 ng/ml B Figure 2S Administration of E-MSCs does not affect CCL8 (A) and sTNFr1 (B) serum levels in mice with GVHD. Serum was collected from mice with established GVHD at day 6. Livers were collected from the same mice at day 6, processed for paraffin embedding, sectioned for histologic examination with hematoxylin/eosin and semiquantitative scoring of lobular inflammation (C-D). Two representative sections of liver stained with haematoxylin and eosin (E) or immunostained (brown) for CD3 (F) of GVHD animals without (left) or with E-MSCs treatment (right column). Scale bar 100  m, 5 mice per group. A D E GVHDE-MSCs 0.0 0.5 1.0 1.5 2.0 Lobular infiltration score F GVHD+ E-MSCs 0 2 4 6 8 10 12 Cumulative score C 10

3. Syngeneic ctr GVHD GVHD + E-MSCs s.c. GVHD+ free MSCs.c. Figure 3S Cell encapsulation does not modify the immuno-regulatory properties of MSCs. BALB/c mice irradiated with 700 rad were inoculated intravenously with 10 7 bone marrow cells (BMC) and 15x10 6 spleen cells derived from C57 donor mice while mice indicated as syngeneic controls received bone marrow and spleen cells derived from BALB/c donors. After 2 days, one group of mice received a s.c. injection of 400.000 either encapsulated or free MSCs. Survival curves for the experimental groups are shown. Data from two experiments were pooled (syngeneic control: n=4; GVHD: n=16; E-MSCs treated: n=19; free MSCs: n=13). The results are presented as Kaplan-Meier survival curves. Statistical difference was demonstrated between GVHD-positive controls and mice treated with E- MSCs or free MSCs s.c. (P < 0.0001). No difference was found between mice treated with E-MSCs or free MSCs s.c.. 051015202530 0 10 20 30 40 50 60 70 80 90 100 110 days Percent survival 11