Alginate is frequently used for cell encapsulation, but its biocompatibility is neither optimal nor reproducible. Purifying the alginate is critical for achieving a suitable biocompatibility. However, published purification methods vary in efficiency and may induce changes in polymer biofunctionality. Applying X-ray photoelectron spectroscopy, we showed that commercial alginates, purified by in-house and industrial methods, contained elemental impurities that contributed 0.41-1.73% of their atomic composition. Residual contaminants were identified to be proteins (nitrogen/COOH), endotoxins (phosphorus), and fucoidans (sulphur). Studies using attenuated total reflectance Fourier transform infrared spectroscopy suggested that trace contamination did not alter the alginate molecular structure. Alginate hydrophilicity increased by 19-40% after purification, in correlation with a reduction in protein and polyphenol content. Solution viscosity of the alginate increased by 28-108% after purification, in correlation with a reduction in protein content. These results demonstrate that commercial alginates contain potentially immunogenic contaminants that are not completely eliminated by current purification methods. Moreover, these contaminants alter the functional properties of the alginate in a manner that may compromise biocompatibility: Hydrophilicity may affect protein adsorption and solution viscosity influences the morphology of alginate-based microcapsules. These findings highlight the need to improve and better control alginate purity to ensure a reproducible biofunctionality and optimal biocompatibility of alginate and microcapsules.