The encapsulation based technology permits long-term delivery of desired therapeutic products in local regions of body without the need of immunosuppressant drugs. In this study microcapsules composed of sericin and alginate micro bead as inner core and with an outer chitosan shell are prepared. This work is proposed for live cell encapsulation for potential therapeutic applications. The sericin protein is obtained from cocoons of non-mulberry silkworm Antheraea mylitta. The sericin-alginate micro beads are prepared via ionotropic gelation under high applied voltage. The beads further coated with chitosan and crosslinked with genipin. The microcapsules developed are nearly spherical in shape with smooth surface morphology. Alamar blue assay and confocal microscopy indicate high cell viability and uniform encapsulated cell distribution within the sericin-alginate-chitosan microcapsules indicating that the microcapsules maintain favourable microenvironment for the cells. The functional analysis of encapsulated cells demonstrates that the glucose consumption, urea secretion rate and intracellular albumin content increased in the microcapsules. The study suggests that the developed sericin-alginate-chitosan microcapsule contributes towards the development of cell encapsulation model. It also offers to generate enriched population of metabolically and functionally active cells for the future therapeutics especially for hepatocytes transplantation in acute liver failure. © 2014 Elsevier B.V.