Bacterial cellulose (BC) has excellent material properties and can be produced sustainably through simple bacterial culture, but BC-producing bacteria lack the extensive genetic toolkits of model organisms such as Escherichia coli (E. coli). Here, a simple approach is reported for producing highly programmable BC materials through incorporation of engineered E. coli. The acetic acid bacterium Gluconacetobacter hansenii is cocultured with engineered E. coli in droplets of glucose-rich media to produce robust cellulose capsules, which are then colonized by the E. coli upon transfer to selective lysogeny broth media. It is shown that the encapsulated E. coli can produce engineered protein nanofibers within the cellulose matrix, yielding hybrid capsules capable of sequestering specific biomolecules from the environment and enzymatic catalysis. Furthermore, capsules are produced which can alter their own bulk physical properties through enzyme-induced biomineralization. This novel system uses a simple fabrication process, based on the autonomous activity of two bacteria, to significantly expand the functionality of BC-based living materials.