Encapsulation of insulin–producing cells (IPCs) has been widely investigated to improve cell transplantation outcomes in diabetic patients. Nonetheless, major hurdles impede the technology from reaching the clinic, some of which being the limited survival of isolated beta cells and the inability of polymers used in the encapsulation process to mimic the natural pancreatic niche. To surmount these obstacles, we present a unique microencapsulation platform incorporating a natural bioactive material: porcine pancreatic extracellular matrix (pECM). In this research, pECM-based encapsulation platforms were designed for each of two cell types – pancreatic islets, the gold standard of diabetes-cell-based therapy, and human induced pluripotent stem cells (hiPSCs), a possible source for IPC derivation. Encapsulated hiPSCs proliferated within the pECM microcapsules in culture, forming spherical aggregates. Eight weeks following implantation within healthy mice, encapsulated hiPSCs sustained their viability with no evidence of cell leakage from the capsules into the surrounding tissue. pECM-encapsulation supported murine islet viability and significantly improved their insulin secretion over time, compared to alginate-encapsulation. Implantation in healthy mice did not elicit an inflammatory response, and islets remained viable and functional. Moreover, normoglycemia was achieved within 2 days in 100% of immunocompetent diabetic mice implanted with islets encapsulated in pECM microcapsules, as opposed to only 50% receiving alginate-encapsulated islets. Wednesday, 23/09/