Acute respiratory distress syndrome (ARDS) affects over 300,000 Americans annually with a 43% mortality rate. Inflammation plays a key pathogenic role in mortality, particularly in the one-third of patients with hyperinflammatory ARDS. Inflammation also drives subsequent development of pulmonary fibrosis and interstitial lung disease (ILD) that leads to progressive respiratory failure among ARDS survivors. Cytokines, such as Interleukin-1 receptor antagonist (IL-1Ra) and Interleukin-10 (IL-10), suppress inflammation and promote lung repair in ARDS animal models. However, current systemic administration approaches to deliver these cytokines in therapy remain plagued by poor biodistribution, toxicity, infections due to deleterious systemic immunosuppression, and paradoxical pro-inflammatory responses, all of which limit clinical translation. We have overcome these critical limitations by developing an innovative and translational cell therapy platform that enables sustained locally administration to the lungs. We have engineered retinal pigment epithelial (RPE) cells to produce IL-1Ra and IL-10 in a more physiologically relevant paracrine fashion at high local concentrations without systemic absorption and have encapsulated them in alginate-based core-shell capsules, shielding them from the host immune system and allowing them to serve as a regulatable in situ cytokine “factories”. We have demonstrated that local delivery modulates inflammation and improves outcomes in ARDS. In this proposal, we hypothesize that pulmonary implantation of RPE cytokine factories will enable sustained local, and titratable delivery of IL-1Ra and IL-10 to the lungs, with temporal control. We will develop 2 novel RPE capsule systems that will be tailored specifically for: (i) airway-instillation (Ai-RPE) that allows direct contact with inflamed alveolar epithelial surfaces for acute suppression of inflammation and (ii) pleural-instillation (Pi-RPE) which can support long term RPE cell survival for chronic sustained therapy required to stimulate tissue remodeling. In Aim 1, we will engineer Ai-RPE IL-1Ra capsules to suppress acute lung inflammation and prevent lung scaring in endotoxin and viral (influenza) inflammation ARDS rat models. We will incorporate programmable biodegradation for therapy cessation and airway clearance. In Aim 2, we will validate Pi-RPE for sustained delivery of IL-10 and IL- 1Ra cytokine factories as mono- or combination therapies to reverse pulmonary fibrosis in a bleomycin ARDS rat model. We will assess the long-term fate of RPE cells in vivo and integrate an apoptotic cell safety switch to cease therapy post-administration. In Aim 3, the ability to titrate and cease therapy post-implantation in a clinically relevant fashion will be evaluated in a porcine model. Efficacy of RPE therapy will be tested in a porcine ARDS model. Overall, these studies will develop therapeutic “off-the-shelf” RPE cytokine factories with sustained survival and functi...