Transplantation of encapsulated living cells is a promising approach for the treatment of a wide variety of diseases. Large-scale application of the technique, however, is hampered by insufficient biocompatibility of the capsules. In the present study, we have implemented new as well as previously reported technologies to test biocompatibility issues of immunoisolating microcapsules on the long term (i.e. 2 years) instead of usually reported short time periods. When transplanted empty, the capsules proved to be highly biocompatible not only for short periods (i.e. 1 month) but also on the long term as evidenced by the absence of any significant biological response up to 2 years after implantation in rats. The immunoprotective properties of the capsules were confirmed by prolonged survival of encapsulated islet allografts up to 200 days. The surface of the applied capsule was analyzed and provides new insight in the chemical structure of true biocompatible and immunoprotective capsules applicable for transplantation of encapsulated islets in type I diabetes.