One of the current challenges faced in cell therapy is a lack of approved polymeric cell carriers that could aid in delivery of cells. An ideal polymer would enhance cell survival and degrade within an acceptable time frame without triggering an immune response from the host. This study is aimed at exploring the use of a hydrogel as a “protective envelope” for cells that experience high stress exerted during transplantation. We have developed a gelatin-hydroxyphenyl propionic acid (GA-HP) hydrogel with a gelation time of 20 seconds. Human retinal progenitor cells (hRPCs) were cultured in different condition (PBS with endothelial growth factor (EGF), cells encapsulated in gel with PBS and EGF). Live-dead assay shows cells encapsulated in gel have higher viability in comparison with non-gel cultures. In order to mimic transplantation conditions cells were injected onto a cover slip using small caliber needle used for in-vivo transplantation. Cells cultured with gel show higher viability and proliferation in comparison to the monolayer culture. Apoptosis quantification using CAS9 clearly indicated the protective properties of the gel. Flow cytometry assay shows cells encapsulated in gel express higher percentage of stemness and retinal progenitor markers. More viable cells were found in the 3D culture compared to saline-delivered controls. Furthermore, an in-vivo study with long Evans rats shows higher integration and viability of cell injected in the 3D culture after 3 days. This study demonstrates GA-HP injected in-situ crosslinking biodegradable hydrogel has the potential to be used as cell carrier for in-vivo delivery of stem and progenitor cells.