The goal of islet transplantation in human diabetes is to maintain the islet grafts in the recipients without the use of immunosuppression. One approach is to encapsulate the donor islets in permselective membranes. Hollow fibers fabricated from an acrylic copolymer were used to encapsulate small numbers of rat islets that were immobilized in an alginate hydrogel for transplantation in diabetic mice. The fibers were biocompatible, prevented rejection, and maintained normoglycemia when transplanted intraperitoneally; hyperglycemia returned when the fibers were removed at 60 days. Normoglycemia was also maintained by subcutaneous implants that had an appropriately constructed outer surface on the fibers.