The dataset includes all raw data for the journal article. It includes flow cytometry data (.fcs files) for figures 2 and 4 measuring the splenocyte count in each sample. This gives a measure of the immunosupression of splenocyte proliferation by mesenchymal stromal cells. It also includes PCR data for figure 3 was obtained using StepOne software (ThermoFisher). This dataset shows the effect of alginate encapsulation on MSC immunosuppressive genes. It contains the gene expression levels, as measured through qRT-PCR, on key immunosupressive genes IDO , NOS2, ARG1 and PTGS2 using β-Actin and HPRT-1 as the housekeeping genes. MSC as monolayers on tissue culture plastic or encapsulated within alginate beads were either left untreated or exposed to 10 mg/ml TNF-α, 10 ng/ml INFγ or both (10 ng/ml TNF-α + 10 ng/ml INFγ) for 24h.