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Coronary artery disease leads to over 360,000 deaths annually in the United States, and off-the-shelf bypass graft options are currently limited and/or have high failure rates. Tissue-engineered vascular grafts (TEVGs) present an attractive option, though the promising mesenchymal stem cell (MSC)-based implants face uncertain regulatory pathways. In this study, “artificial MSCs” (ArtMSCs) were fabricated by encapsulating MSC-conditioned media (CM) in poly(lactic-co-glycolic acid) microparticles. ArtMSCs and control microparticles (Blank-MPs) were incubated over 7 days to assess the release of total protein and the vascular endothelial growth factor (VEGF-A); releasates were also assessed for cytotoxicity and promotion of smooth muscle cell (SMC) proliferation. Each MP type was loaded in previously published “lyogel” silk scaffolds and implanted as interposition grafts in Lewis rats for 1 or 8 weeks. Explanted grafts were assessed for patency and cell content. ArtMSCs had a burst release of protein and VEGF-A. CM increased proliferation in SMCs, but not after encapsulation. TEVG explants after 1 week had significantly higher patency rates with ArtMSCs compared to Blank-MPs, but similar to unseeded lyogel grafts. ArtMSC explants had lower numbers of infiltrating macrophages compared to Blank-MP explants, suggesting a modulation of inflammatory response by the ArtMSCs. TEVG explants after 8 weeks showed no significant difference in patency among the three groups. The ArtMSC explants showed higher numbers of SMCs and endothelial cells within the neotissue layer of the graft compared to Blank-MP explants. In sum, while the ArtMSCs had positive effects acutely, efficacy was lost in the longer term; therefore, further optimization is needed.