Recent advances in engineered bacterial therapeutics underscore their potential in treating diseases via targeted, live interventions. Despite their promising performance in early clinical phases, no engineered therapeutic bacteria have yet received approval, primarily due to challenges in proving efficacy while ensuring biosafety. Material science innovations, particularly the encapsulation of bacteria within hydrogels, present a promising avenue to enhance bacterial survival, efficacy, and safety in therapeutic applications. This review discusses this interdisciplinary approach to develop living therapeutic materials. Hydrogels not only safeguard the bacteria from harsh physiological conditions but also enable controlled therapeutic release and prevent unintended bacterial dissemination. The strategic use of encapsulation materials could redefine the delivery and functionality of engineered bacterial therapeutics, facilitating their clinical translation.