Anisotropic alginate hydrogels with microchannels can provide a substrate for cotransplanted cells and for axons in the injured spinal cord by physically guiding regenerating axons across a lesion. However, alginate gels alone only result in modest axonal growth responses. To determine whether modification of negatively charged alginate hydrogels with positively charged polyamino acids (poly-l-ornithine [PLO]) and laminin enhance axonal growth, cell adhesion, and neurite growth were examined in vitro and in vivo. Up to 400 mu g peptide/mg alginate dry weight could be electrostatically bound for at least 2 weeks in vitro significantly increasing cell adhesion and neurite outgrowth from dorsal root ganglion neurons. In vivo, PLO/laminin-coated hydrogels grafted into a cervical lateral hemisection in adult female Fischer 344 rats resulted in increased host cell migration into alginate channels and a slight increase in neurite growth. To further enhance integration of scaffolds, syngeneic postnatal astrocytes isolated from GFP-transgenic rats were seeded into coated alginate channels before grafting. Astrocytes survived, filled the majority of alginate channels, and served as a cellular bridge for axons. Regenerating axons, including descending serotonergic fibers, preferentially extended into astrocyte-containing channels, which contained a higher number of axons over the entire length of the hydrogel. Thus, alginate hydrogel scaffolds can be stably modified with bioactive peptides and cografts of postnatal astrocytes further promote scaffold integration and neurite extension. Impact Statement Axonal bridging across a lesion in the injured spinal cord requires a growth substrate and guidance cues. Using alginate hydrogels with capillary channels we show that poly-l-ornithine and laminin can be stably bound and improve cell adhesion and neurite growth in vitro, and axon growth in vivo by enhancing host cell infiltration in the injured spinal cord. Filling of coated hydrogels with postnatal astrocytes further increases short-distance axon growth and results in a continuous astroglial substrate across the host/graft interface. Thus, positively charged bioactive molecules can be stably bound to anisotropic capillary alginate hydrogels and early astrocytes further promote tissue integration.