The study aimed to develop a biocompatible microcapsule for hepatocytes and create a bio-mimic microenvironment for maintaining hepatic-specific functions of hepatocytes in vitro. The work is proposed for the bioartificial liver system in the treatment of liver failure. In this study, microcapsules were prepared with hyaluronate (HA)/sodium alginate (SA) as an inner core and an outer chitosan (CS) shell via one-step spraying method. C3A cells were encapsulated in microcapsules to examine the biocompatibility of HA-SA-CS microcapsules. MTT and fluorescence microscopy indicated that C3A cells had high viability in the HA-SA-CS microcapsules. The liver-specific functions, such as urea and albumin synthesis, and CYP1A2 and CYP3A4 activities from encapsulated cells were increased in the HA-SA-CS microcapsules compared to the SA-CS microcapsules. The gene expressions of CYP450 related genes were also increased by HA on day 3. The study suggests that HA-SA-CS microcapsules have good biocompatibility and can maintain a favorable environment for hepatocytes. This approach has improved the preservation of liver cells’ metabolic functions and could be a candidate for the bioartificial liver system.