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There is no cure yet available for Alzheimer’s disease (AD). We recently optimized encapsulated cell biodelivery (ECB) devices releasing human mature nerve growth factor (hmNGF), termed ECB-NGF, to the basal forebrain of AD patients. The ECB-NGF delivery resulted in increased CSF cholinergic markers, improved glucose metabolism, and positive effects on cognition in AD patients. However, some ECB-NGF implants showed altered hmNGF release post-explantation. To optimize the ECB-NGF platform for future therapeutic purposes, we initiated in-vitro optimization studies by exposing ECB-NGF devices to physiological factors present within the AD brain. We report here that microglia cells can impair hmNGF release from ECB-NGF devices in-vitro, which can be reversed by transferring the devices to fresh culture medium. Further, we exposed the hmNGF secreting human ARPE-19 cell line (NGC0211) to microglia (HMC3) conditioned medium (MCM; untreated or treated with IL-1β/IFNγ/Aβ₄₀/Aβ₄₂), and evaluated biochemical stress markers (ROS, GSH, ΔΨ_m, and Alamar Blue assay), cell death indicators (Annexin-V/PI), cell proliferation (CFSE retention and Ki67) and senescence markers (SA-β-gal) in NGC0211 cells. MCMs from activated microglia reduced cell proliferation and induced cell senescence in NGC0211 cells, which otherwise resist biochemical alterations and cell death. These data indicate a critical but reversible impact of activated microglia on NGC0211 cells.