Immune rejection rapidly destroys cellular transplants, particularly xenografts. Encapsulation of xenografts with an artificial membrane has been proposed as a means of cell immunoprotection after transplantation. Currently, organic biocapsule materials are used in this context, and have presented significant problems that relate to capsule biodegradation and limited biocompatibility. In this review, we describe our alternative approach to immunoisolation using microfabricated biocapsules. Previous studies have shown the viability and functionality of various cell lines within our biocapsule microfabricated environment. This review describes general cell culture wafer and biocapsule fabrication protocols, as well as, in vitro studies on the viability and functionality of pancreatic islets of Langerhans in microfabricated culture wafers and biocapsules.