Polysaccharide (alginate and chitosan) capsules coated with a unique self-assembled semi-crystalline shell of calcium phosphate provide an enclosed biological system for the spatial and temporal delivery of human cells and bioactive factors. The aim of this study was to demonstrate plasmid DNA entrapment, delivery and transfection of adjacent cells inside capsules, embedded capsules and plated. Bacterial plasmid DNA and/or bone cells (SaOS) was added to solution of sodium alginate solution supplemented with phosphate ions and mixed thoroughly. Alginate droplets were fed through a syringe into a solution of chitosan supplemented with calcium ions. Guest capsules were inserted into soft, pliable host capsules soon after immersion in chitosan solution. Capsules were then immersed in 2mL DMEM 10% FCS in 6-well plastic plates for up to 7 days to enable transfection to occur. Encapsulated bone cells were stained with standard X-Gal to show transfected cells expressing beta-galactosidase. DNA delivery and transfection was demonstrated within capsules containing SaOS cells and plasmid, an admixture of SaOS bone cells and plasmid (51%) and from capsules containing DNA alone suspended in media over plated SaOS one cells. We also demonstrate capsule transfection of encapsulated cells in vivo. Transfection efficiency is highest when plasmid is entrapped and released from embedded capsules followed by plasmid/ SaOS admixture within capsules and lowest efficiency was observed with plated SaOS cells (with a transfection efficiency of 5%). The ability to regulate shell decomposition by manipulating the degree of mineralization and the strength of gelling, and release of capsule contents provides a mechanism for programmed release of gene modulated cells into the biological environment. The beta-galactosidase plasmid was found to be strongly associated with the chitosan/ calcium phosphate shell as shown by ethidium-homodimer-1 staining of encapsulated DNA and this may assist the transfer from gel to cell. Programmed non-viral delivery of genes using biomaterial constructs is an important approach to gene therapy and orchestrated tissue regeneration. These unique biomineralised polysaccharide capsules provide a facile technique, and an enclosed biomimetic micro-environments with specifiable degradation characteristics, for the safe encapsulation and delivery of functional quantities of plasmid DNA with the implicit therapeutic implications therein.