Encapsulation systems have been developed in which cells are separated from the immune system of the host by permselective barriers. These systems do not require a life-long regimen of high dose immunosuppressive drugs to prevent immune rejection. Furthermore, they offer a solution to the problem of human cell procurement by permitting use of cells and tissues from animal sources. Three major types of immunoisolation devices have been studied by our group. These include perfusion devices anastomosed to the vascular system as atrioventricular (AV) shunts, tubular membrane diffusion chambers, and microreactors. This technology is applicable to treating a number of diseases by transplantation of cells that produce specific bioactive substances. In essence, this approach constitutes a living drug delivery and detoxification system. Our work has focused mainly on developing a new treatment for diabetes using encapsulated pancreatic islets. In the first type of system, canine and porcine islets were distributed in a chamber surrounding a permselective acrylic membrane (nominal M(r) exclusion of 80 kDa), and the devices implanted intraperitoneally as AV shunts into diabetic, totally pancreatectomized dogs without use of immunosuppression. In the second type of system, the islets were sealed within the acrylic membranes and the chambers implanted into the peritoneum of diabetic, pancreatectomized dogs (canine islets), streptozotocin (STZ)-induced diabetic rats (canine, bovine and porcine islets), and spontaneously diabetic BB/Wor rats (canine islets) without use of immunosuppression. In the third type of system (microreactors), the islets were implanted into the peritoneum of STZ-induced diabetic mice without use of immunosuppression, into STZ-induced diabetic rats (bovine and porcine islets) both with and without use of low dose immunosuppression, and into spontaneously diabetic dogs (canine islets) with low dose CsA. Results indicate that all three types of encapsulation systems significantly improve glucose homeostasis and can function for periods of several months to more than a year.