Encapsulated-cell therapy (ECT) is an attractive approach for continuously delivering freshly synthesized therapeutics to treat sight-threatening posterior eye diseases, circumventing repeated invasive intravitreal injections and improving local drug availability clinically. Composite collagen-alginate (CAC) scaffold contains an interpenetrating network that integrates the physical and biological merits of its constituents, including biocompatibility, mild gelling properties and availability. However, CAC ECT properties and performance in the eye are not well-understood. Previously, we reported a cultured 3D CAC system that supported the growth of GDNF-secreting HEK293 cells with sustainable GDNF delivery. Here, the system was further developed into an intravitreally injectable gel with 1x104 or 2x105 cells encapsulated in 2mg/ml type I collagen and 1% alginate. Gels with lower alginate concentration yielded higher initial cell viability but faster spheroid formation while increasing initial cell density encouraged cell growth. Continuous GDNF delivery was detected in culture and in healthy rat eyes for at least 14 days. The gels were well-tolerated with no host tissue attachment and contained living cell colonies. Most importantly, gel-implanted in dystrophic Royal College of Surgeons rat eyes for 28 days retained photoreceptors while those containing higher initial cell number yielded better photoreceptor survival. CAC ECT gels offers flexible system design and is a potential treatment option for posterior eye diseases.