This research characterized the cells used in the formation and growth of substitute arteries for use in treatments such as bypass surgery. Two cell types including immortalized rat smooth muscle cells (rSMCs) and adult human mesenchymal stem cells (hMSCs) were used to study this tissue engineered blood vessel system. Sodium alginate was used as the natural polymer to construct the tubular three-dimensional construct. Normally biologically inert, the alginate was modified to incorporate GRGDY peptides using carbodiiamide chemistry to provide cell adhesion sites for the cells. The growth characteristics of the rSMCs and hMSCs in tissue flasks were established. Each cell source was assessed according to the viability post-thaw and at each passage, the cell yield and the glucose concentration in the spent medium. Following these measurements, the population doubling per day, the specific growth rate and the glucose consumption rate of the cells were calculated. Concurrently, the alginate was formed into sheets, beads or hollow tubes and the interaction of the cells with the alginate was studied. The biological activity of the alginate matrices was assessed by observing the cells' interaction with the matrices. Measurements such as viability of the cells post-immobilization into the alginate, cell growth and glucose consumption were made and compare to data for cell growth in tissue flasks. The survival and metabolic activity of the cells within the alginate matrices were also measured using the MTT (3-(4,5-dimemylthiazol-2-yl)-2,5-diphenyltetrazolium bromide) assay. Modifications were made to dissolve the cell/alginate matrix and incorporate a frozen storage step for analysis of time course samples. Both the rSMCs and hMSCs readily attached and elongated when seeded onto the surface of alginate-GRGDY hydrogel sheets. However, only the hMSCs attached and elongation when immobilized within the alginate-GRGDY tubes and beads. Differentiation studies were conducted on the hMSCs immobilized within alginate-GRGDY beads using conditioned-medium (microfiltrate) from rSMC co-cultures. Expression of the hMSC surface markers SH2 and SH4 were lost after 6 days in co-culture. Immunohistological preparations of the beads confirmed the hMSCs expressed a-smooth muscle actin (ASMA). Control cultures of hMSCs in alginate-GRGDY beads placed in unconditioned medium retained their expression of SH2 and SH4 and did not express ASMA. Using the MTT assay, the hMSCs were shown not to proliferate in unmodified alginate and alginate-GRGDY beads over the 2 week period examined.