The overall objective of this research program is to develop implantable microreactors containing islets for treatment of diabetic patients. This Phase I proposal focuses on development of technology required to fabricate these microreactors, and on in vitro studies of islet viability and function. These spherical microreactors will consist of a core which contains the islets, surrounded by a permselective shell. This permselective coating permits crossover of low molecular weight substances, including nutrients, electrolytes, oxygen and bioactive secretory products such as insulin, but not of immunocytes and other transplant rejection effector mechanisms. These microreactors are of sufficiently small diameter that they can be injected subcutaneously, intraperitoneally or in other sites simply by using a hypodermic syringe and needle. This approach does not require lifelong regimen of immunosuppressive drugs with serious side effects. In addition, it does not require costly and complicated surgery, and offers a solution to the presently insurmountable problem of procuring sufficient numbers of human pancreatic organs by permitting xenografting of islets from animal sources.