There has been a consistent increase in the mean life expectancy of the population of the developed world over the past century. Healthy life expectancy, however, has not increased concurrently. As a result we are living a larger proportion of our lives in poor health and there is a growing demand for the replacement of diseased and damaged tissues. While traditionally tissue grafts have functioned well for this purpose, the demand for tissue grafts now exceeds the supply. For this reason, research in regenerative medicine is rapidly expanding to cope with this new demand. There is now a trend towards supplying cells with a material in order to expedite the tissue healing process. Hydrogel encapsulation provides cells with a three dimensional environment similar to that experienced in vivo and therefore may allow the maintenance of normal cellular function in order to produce tissues similar to those found in the body. In this review we discuss biopolymeric gels that have been used for the encapsulation of mammalian cells for tissue engineering applications as well as a brief overview of cell encapsulation for therapeutic protein production. This review focuses on agarose, alginate, collagen, fibrin, hyaluronic acid and gelatin since they are widely used for cell encapsulation. The literature on the regeneration of cartilage, bone, ligament, tendon, skin, blood vessels and neural tissues using these materials has been summarised.