Most lysosomal enzyme deficiencies are catastrophic illnesses with no generally available treatments. We have used the β-glucuronidase-deficient mouse model of mucopolysaccharidosis type VII (MPS VII) to develop an alternative approach to therapy. A 'universal' cell line engineered to secrete the missing enzyme is implanted in all recipients requiring the same enzyme replacement. The cells, although nonautologous, are rendered immunologically tolerant by encapsulation in microcapsules that provide protection from immune mediators. Using this strategy, we injected β-glucuronidase-secreting fibroblasts enclosed in alginate microcapsules into mutant MPS VII mice. After 24 hr, β-glucuronidase activity was detected in the plasma, reaching 66% of physiological levels by 2 weeks postimplantation. Significant β-glucuronidase activity was detected in liver and spleen for the duration of the 8-week experiment. Concomitantly, the intralysosomal accumulation of undegraded glycosaminoglycans was dramatically reduced in liver and spleen tissue sections and urinary glycosaminoglycan content was reduced to normal levels. Elevated secondary lysosomal enzymes β-hexosaminidase and α-galactosidase were also reduced. However, implanted mutant MPS VII mice developed antibodies against the murine β-glucuronidase, demonstrating a potential obstacle in patients with a null mutation who react against the replaced enzyme as a foreign antigen. The antibody response was transiently circumvented with a single treatment of purified anti-CD4 antibody coadministered with the microcapsules. This resulted in increased levels and duration of β-glucuronidase delivery. Similarly, treated heterozygous mice maintained elevated levels of β-glucuronidase and did not develop antibodies. This novel cell-based therapy demonstrates a potentially cost-effective and nonviral treatment applicable to all lysosomal storage diseases.