The objective of this Phase II research grant application is to develop a biocapsule implant containing insulin producing islet cells and then test the implant in vitro and in vivo models to set the stage for clinical development of the product with a pharmaceutical partner. Results from the Phase I program demonstrated that nanopore membranes can effectively immunologically protect xenograft insulin producing cells suspended in a matrix by allowing passage of glucose, nutrients and insulin while restricting entry of immunoglobulins and other components that may attack and destroy insulin producing cells. The Phase II program will develop a prototype implant suitable for preclinical testing in small and large animal models, if successful, this implant promises to replace insulin injections with an implant containing islet cells that produce insulin in response to the patients demands, maintaining normal levels of blood glucose. Unlike other islet cell transplantation, this approach can make use of a potentially large supply of islet cells from pigs or human stem cells without the need for any immunosuppressive therapy. The implant will keep transplanted islet cells sequestered from the recipient's immune system. It will be durable, rechargeable and, if problems develop, removable.