Experimental dogs with alloxan-induced diabetes mellitus (n = 22) were transplanted into the abdominal aorta lumen with macroencapsulated xenogenic rabbit islet cells without immunosuppressive therapy. The investigation showed normalization of the blood glucose level and disappearance of diabetes mellitus symptoms. Morphological and immunohistochemical investigations 13 months later demonstrated preservation and functional activity of up to 60% of the transplanted islet cells. Meanwhile by month 6 a structure similar to the Islet of Langerhans had formed in the capsule. The majority of the mass of cells was insulin-positive by immunohistochemical investigation. The bloodstream appears to be an immune-privileged zone, where no graft rejection develops and long-term preservation-function of xenogenic islet cells may be possible. Macroencapsulated islets transplanted into the vascular lumen may form an endocrine apparatus of a bioartificial pancreas.