Development of a 3D bio-engineered hepatic tissue that exhibit stable phenotype upon long-term maintenance is a major challenge in the field of liver tissue engineering. The cell encapsulation technology using hydrogels is a promising strategy applicable to generate microtissue constructs, including bioartificial microliver. These microgels provide a protective and conducive microenvironment within which the cells spread and proliferate efficiently. However, a suitable equilibrium between the stability and diffusional properties need to be maintained to promote the long-term functionality of encapsulated cells. In this study, human hepatocellular carcinoma cells (HepG2) were encapsulated within different natural-origin biomaterials: Alginate (0.5% (w/v), 1.0% (w/v), 1.5% (w/v)); Alginate (1.0% (w/v), 1.5% (w/v)) mixed with rat-tail collagen type I (1 mg/mL) (1:1) and, Alginate (1.5% (w/v)) mixed with rat-tail collagen type I (1 mg/mL) coated with medium molecular weight-chitosan (0.75% (w/v) (multilayered microbead). The goal was to improve the viability and functionality of encapsulated HepG2 cells in alginate hydrogels by blending with rat-tail collagen type-I, upon long-term culture. Moreover, to prevent the possible leakage of collagen and simultaneously increasing the stability of the microbead, a natural polymeric cross-linker, chitosan, was used to coat the alginate/collagen microbeads. The microencapsulation of cells were performed by using a syringe pump and a 27G needle gauge, followed by ionic cross-linking with CaCl₂ solution. The size and morphology of the microbeads produced by the proposed system were uniform, when parameters were kept constant. The mean diameter of the microbeads was around 1.5 mm. Live/dead assay results on Day 1 showed  the cell viability dropped significantly, but within three days of culture the remaining viable cells regained vitality and started proliferating. After 7 days, for all cell seeding conditions tested (0.5, 1 and, 2 million cells/mL) cell proliferation was associated with 3D cell organization, which adopted different morphologies. Interestingly, 1.5% (w/v) alginate, 1.5% (w/v) alginate mixed with collagen type I and, the chitosan coated alginate/collagen microbeads supported rearrangement of HepG2 cells towards both hepatic cord-like structures as well as typical spheroids formation, while in the rest of the conditions cell proliferation was associated exclusively towards spheroids organization. In summary, we succeeded in reconstructing a 3D bio-artificial microliver construct with hepatic cord-like organization and spheroids formation, using HepG2 cells  and alginate hydrogel-based microencapsulation model. Acknowledgements: Authors acknowledge the financial support from Portuguese Foundation for Science and Technology R&D grant POCI-01-0145-FEDER-016715 (PTDC/BBB-ECT/4317/2014) for the project MicroLiver and European Research Council grant agreement ERC-2012-ADG 20120216-321266 for the project ComplexiTE.