The intraperitoneal injection of insulin-producing islets, immunoprotected by an alginate-polyamino acid membrane, is a potential method of reversing diabetes without the need for life-long immunosuppression. Using alginate high in guluronic acid content, we have successfully reversed diabetes in the spontaneous diabetic dog model following intraperitoneal (IP) encapsulated allograft. Two-year follow- up studies in five dogs successfully treated with encapsulated islets demonstrated that multiple transplants were safe and efficacious with excellent long-term glycemic control and ongoing graft function even after discontinuation of all antirejection drugs. Toxicity studies of the capsule demonstrated no evidence of acute toxicity or mutagenicity. These studies formed the preclinical basis for human clinical trials. We have completed our first human clinical transplant of encapsulated islets in a Type I diabetic patient and have demonstrated ongoing islet function over six months post transplant. In order for this technology to be made available to the 1.1 million diabetic patients who could benefit from this procedure xenograft encapsulated islets must be developed. The purpose of this proposal is to develop islet isolation techniques from pig pancreata utilizing collagenase developed by recombination DNA technology, and demonstrating that encapsulated porcine islets can reverse diabetes in the small animal model.