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Islet transplantation is a potential cure for diabetes mellitus. The major problem for broad clinical application remains the prevention of transplant rejection without major side effects. Immunoisolation is an experimental strategy to prevent rejection by separating the transplanted cells from the host immune system using a barrier device. Current methods use artificial, not completely inert materials as barrier devices and induce an unwanted foreign-body (FB) reaction. Using the recipients of own cells for encapsulation, the FB reaction could be prevented. This study describes a new method of encapsulation of islets of Langerhans within a capsule of chondrocytes, which may serve as an immunoisolation barrier utilizing the immunoprivileged properties of the chrondrocyte matrix, and demonstrates the functional survival of the encapsulated islets in vitro.