Hepatocyte encapsulation was proposed as a promising strategy, combined with the activation of liver regeneration. By preventing acute and chronic liver failure, it bridges the gap between patients on the waiting list and liver transplantation. Alginate is one of the most commonly employed hydrogels for encapsulating hepatocytes. Chelating ions, on the other hand, decrosslink alginate in vivo and ultimately induce cell death. This work aimed to increase the mechanical stability of alginate capsules and the specific cellular functions of hepatocytes in vivo and clinical applications by coating them with a chitosan shell. A one-step preparation process was used to produce chitosan-coated-alginate capsules. The liver-specific functions of encapsulated hepatocytes were evaluated. The results revealed that Alginate-25% chitosan (Chs25)-encapsulated hepatocytes had enhanced liver-specific functions, particularly urea and albumin secretion, compared to the control samples. In addition, reduced secretion of aspartate aminotransferase (AST) and lactate dehydrogenase (LDH) has been observed. A live/dead fluorescence assay was used to determine the viability of encapsulated hepatocytes, and the results showed that chitosan-coated-alginate capsules could provide a suitable environment for hepatocyte transport. Our findings suggest that Chs25 capsules maintained a larger population of functionally active hepatocytes for potential therapeutic applications, particularly hepatocyte transplantation in severe liver failure.