While encapsulation of cells within protective nanoporous gel cocoons increases cell retention and pro-survival integrin signaling, the influence of cocoon size and intra-capsular cell-cell interactions on therapeutic repair are unknown. Here, we employ a microfluidic platform to dissect the impact of cocoon size and intracapsular cell number on the regenerative potential of transplanted heart explant-derived cells. Deterministic increases in cocoon size boosted the proportion of multicellular aggregates within cocoons, reduced vascular clearance of transplanted cells and enhanced stimulation of endogenous repair. The latter being attributable to cell-cell stimulation of cytokine and extracellular vesicle production while also broadening of the miRNA cargo within extracellular vesicles. Thus, by tuning cocoon size and cell occupancy, the paracrine signature and retention of transplanted cells can be enhanced to promote paracrine stimulation of endogenous tissue repair.