Immunostimulatory monoclonal antibodies are immunoglobulins directed toward surface proteins of immune system cells that augment the immune response against cancer in a novel therapeutic fashion. Exogenous administration of the recombinant humanized immunoglobulins is being tested in clinical trials with agents of this kind directed at a variety of immune-controlling molecular targets. In this study, the encapsulation of antibody-producing hybridoma cells was tested in comparison with the systemic administration of monoclonal antibodies. Hybridomas producing anti-CD137 and anti-OX40 mAb were encapsulated in alginate to generate microcapsules containing viable cells that secrete antibody. Immobilized cells in vitro were able to release the rat immunoglobulin produced by the hybridomas into the supernatant. Microcapsules were implanted by injection into the subcutaneous tissue of mice and thereby provided a platform for viable secreting cells, which lasted for more than 1 week. The pharmacokinetic profile of the rat monoclonal antibodies following microcapsule implantation was similar to that attained following an intraperitoneal administration of the purified antibodies. The rat-mouse hybridoma cells did not engraft as tumors in immunocompetent mice, while they lethally xenografted in immunodeficient mice, if not microencapsulated. The antitumor therapeutic activity of the strategy was studied on established CT26 colon carcinomas resulting in complete tumor eradication in an elevated fraction of cases and strong tumor-specific CTL responses with either anti-CD137 or anti-OX40 producing hybridomas, thus offering proof of the concept. This form of administration permitted combinations of more than one immunostimulatory monoclonal antibody to exploit the synergistic effects such as those known to be displayed by anti-CD137 and anti-OX40 mAb.