A critical element of Northwestern University MRSEC IRG-1 is interfacing cell-free systems with abiotic materials in a way that supports cell-free reaction efficiency and kinetics. In this work, the capacity of bilayer-based compartments (e.g., liposomes, polymersomes) is being assessed to support encapsulated cell-free reactions upon their inclusion in a larger hydrogel matrix. In particular, giant unilamellar vesicles (GUVs) have been assembled from a phospholipid mixture to enable transcription and translation of a fluorescent protein after GUVs are encapsulated in an alginate hydrogel. This hydrogel/vesicle system is serving as a platform to investigate how vesicle stability and reaction kinetics are impacted as a function of vesicle composition, cell-free extract type, and hydrogel matrix composition. This work is setting the stage for more advanced cell-free reactions that will be initiated based on the presence of an externally detected or added small molecule.