Islet transplantation to treat type 1 diabetes (T1D) has shown varied long-term success, due in part to insufficient blood supply to maintain the islets. In the current study, collagen and collagen:chitosan (10:1) hydrogels, +/- circulating angiogenic cells (CACs), were compared for their ability to produce a pro-angiogenic environment in a streptozotocin-induced mouse model of T1D. Initial characterization showed that collagen-chitosan gels were mechanically stronger than the collagen gels (0.7 kPa vs. 0.4 kPa elastic modulus, respectively), had more cross-links (9.2 vs. 7.4/µm(2)), and were degraded more slowly by collagenase. After gelation with CACs, live/dead staining showed greater CAC viability in the collagen-chitosan gels after 18 h compared to collagen (79% vs. 69%). In vivo, collagen-chitosan gels, subcutaneously implanted for up to 6 weeks in a T1D mouse, showed increased levels of pro-angiogenic cytokines over time. By 6 weeks, anti-islet cytokine levels were decreased in all matrix formulations ± CACs. The 6-week implants demonstrated increased expression of VCAM-1 in collagen-chitosan implants. Despite this, infiltrating vWF(+) and CXCR4(+) angiogenic cell numbers were not different between the implant types, which may be due to a delayed and reduced cytokine response in a T1D versus non-diabetic setting. The mechanical, degradation and cytokine data all suggest that the collagen-chitosan gel may be a suitable candidate for use as a pro-angiogenic ectopic islet transplant site.