Agarose gel micro-droplets supplemented with provisional matrix proteins have been shown to enhance encapsulated cell survival for cell therapy applications. This study evaluated micro-droplet T(1) and T(2) relaxation on a 1.5 T clinical MRI scanner to guide the optimization of encapsulated cell delivery to intermediate-sized animals. Preliminary in vitro experiments using encapsulated human blood-derived endothelial progenitor cells (EPCs) documented a negligible impact of EPC encapsulation on agarose micro-droplet T(1) and T(2) relaxation, even following transient immersion in 2.3 mm Gd-DTPA. Furthermore, Gd-DTPA immersion did not adversely impact encapsulated cell viability. These results allowed for efficient pre-clinical methodological development using direct injections into the rabbit lumbar region of agarose droplets without cells (n=6). At time-points to 6 h, in vivo injection sites displayed elevated T(2) and T(1) (1.8%: DeltaT(2)=53+/-28%, DeltaT(1)=50+/-25%, n=13; 2.5%: DeltaT(2)=41+/-10%, DeltaT(1)=41+/-26%, n=11). Rapid imaging sequences displayed high conspicuity at sites of Gd-DTPA-immersed capsule injection, which persisted for less than 4 h. Therefore, basic differences of micro-droplet T(1) and T(2) when compared to tissue provide a platform for acute tracking of encapsulated cell fate. Transient Gd-DTPA encapsulation accentuates T(1) differences.