Current options for treatment of type I diabetes involve daily administration of insulin along with rigorous monitoring and control of blood glucose levels. In more severe cases, where the blood glucose control is poor, the patient may receive a allotransplant of pancreatic islets that bear insulin producing β cells, in order to restore proper blood glucose regulation. This entails, administration of immunosuppressants therapy in order to prevent graft vs. host rejection of the foreign tissue. Such a situation in controversial, as immunosuppression in a diabetic patient can lead to further complications, namely infection. To avoid immunosuppressive therapy in such disease, tissue encapsulation using sodium alginate has been used successfully in transplant of parathyroid cells in patients suffering from hypoparathyroidism, with the aim of providing an immunopriviledged environment for the graft,  provided by the capability of polymerized alginate to function as a molecular filter. The purpose of the present project is to use the same aforementioned encapsulation techniques, but infused with an immunosuppressant; called Rapamycin in the outer alginate matrix of the capsules. This would create a microenvironment where the immune system would be suppressed locally, which added to the filter properties of alginate, would further allow the encapsulated Islet cells an even better environment to receive nutrients from the body while regulating blood glucose in a patient for prolonged periods.