Late outgrowth (L) endothelial progenitor cells (EPC) represent a uniform, highly endothelial-like progenitor cell population; however, their therapeutic benefits in models of pulmonary arterial hypertension (PAH) are limited by poor cell persistence, due to rapid cell loss by apoptosis (anoikis) and redistribution to non-target organs. Temporary single-cell microencapsulation (i.e. cocooning) provides a portable stem cell niche, that can promote cell survival and retention in animal models of organ lung and heart injury. We hypothesize that microencapsulation of L-EPC with an agarose hydrogel supplemented with integrin-binding proteins will increase survival and retention of L-EPCs injected into the jugular vein and result in greater therapeutic benefits compared to non-cocooned cells in a rat monocrotaline (MCT) model of PAH. L-EPCs were encapsulated by vortex-emulsion using various concentrations of agarose, together with fibronectin and fibrinogen, and capsule size and initial cell viability were assessed. Encapsulated and non-encapsulated L-EPCs were transduced with luciferase and administered to SD rats three days after injection of MCT. L-EPCs were tracked in vivo by bioluminescence imaging (BLI) to assess cell persistence and bio-distribution for up to three weeks post cell injection. At end-study, right ventricular systolic pressure (RVSP) and right ventricular hypertrophy (RVH) were assessed for therapeutic efficacy. The initial BLI signals at 15 minutes after delivery were similar in non-cocooned and cocooned L-EPCs; however, only cocooned cells could be detected by BLI after four and 24 hours (28±12% and 12±8% of baseline signal, respectively; p< 0.0001 and 0.05, n=11). Microencapsulation of L-EPCs led to significant improvement in RVSP three weeks after delivery compared to MCT alone (56±24 vs. 80±7 mmHg, respectively; p<0.05), whereas no improvement in pulmonary hemodynamics was seen with delivery of non-encapsulated cells. These results demonstrate that single-cell cocooning can significantly increase retention of L-EPCs within the lungs. Furthermore, even a modest increase in L-EPC persistence over 24 hours can provide an important therapeutic benefit, not seen with non-encapsulated L-EPCs in the rat MCT model of PAH.