Intrinsic stem cells (SC) participate in tissue remodeling and regeneration in various diseases and following toxic insults. Failure of tissue regeneration is in part attributed to lack of SC protection from toxic stress of noxious stimuli, thus prompting intense research efforts to develop strategies for SC protection and functional preservation for in vivo delivery. One strategy is creation of artificial SC niches in an attempt to mimic the requirements of endogenous SC niches by generating scaffolds with properties of extracellular matrix. Here, we investigated the use of hyaluronic acid (HA) hydrogels as an artificial SC niche and examined regenerative capabilities of encapsulated embryonic endothelial progenitor cells (eEPC) in three different in vivo models. Hydrogel-encapsulated eEPC demonstrated improved resistance to toxic insult (adriamycin) in vitro, thus prompting in vivo studies. Implantation of HA hydrogels containing eEPC to mice with adriamycin nephropathy or renal ischemia resulted in eEPC mobilization to injured kidneys (and to a lesser extent to the spleen) and improvement of renal function, which was equal or superior to adoptively transferred EPC by intravenous infusion. In mice with hindlimb ischemia, EPC encapsulated in HA hydrogels dramatically accelerated the recovery of collateral circulation with the efficacy superior to intravenous infusion of EPC. In conclusion, HA hydrogels protect eEPC against adriamycin cytotoxicity and implantation of eEPC encapsulated in HA hydrogels supports renal regeneration in ischemic and cytotoxic (adriamycin) nephropathy and neovascularization of ischemic hindlimb, thus establishing their functional competence and superior capabilities to deliver stem cells stored in and released from this bioartificial niche.