Islet transplantation can reverse hyperglycaemia in Type 1 diabetes patients. One problem in islet transplantation is a loss of beta cell mass as well as blunted glucagon responses from the grafted islets. It has been suggested that alpha cell loss is associated with close contact of the alpha cells with the implantation organ. In the present study we made use of microencapsulation, where transplanted islets are not in direct contact with the host implantation site. After transplantation, the number of glucagon cells stained per microencapsulated islet section was increased whereas the number of insulin cells stained was decreased. DNA content of the islets was reduced, as was insulin content, whereas glucagon content was unchanged. This indicates that cell number in transplanted microencapsulated islets diminishes, which can be accounted for by loss of beta cells. However, in contrast to previous studies using non-encapsulated islets, alpha cell number seems to be maintained.