Islet transplantation is a feasible therapeutic alternative for metabolically labile patients with type 1 diabetes. The primary therapeutic target is stable glycemic control and prevention of complications associated with diabetes by reconstitution of endogenous insulin secretion. However, critical shortage of donor organs, gradual loss in graft function over time, and chronic need for immunosuppression limit the indication for islet transplantation to a small group of patients. Here we present a promising approach to address these limitations by utilization of a macrochamber specially engineered for islet transplantation. The s.c. implantable device allows for controlled and adequate oxygen supply and provides immunological protection of donor islets against the host immune system. The minimally invasive implantable chamber normalized blood glucose in streptozotocin-induced diabetic rodents for up to 3 mo. Sufficient graft function depended on oxygen supply. Pretreatment with the growth hormone-releasing hormone (GHRH) agonist, JI-36, significantly enhanced graft function by improving glucose tolerance and increasing β-cell insulin reserve in rats thereby allowing for a reduction of the islet mass required for metabolic control. As a result of hypervascularization of the tissue surrounding the device, no relevant delay in insulin response to glucose changes has been observed. Consequently, this system opens up a fundamental strategy for therapy of diabetes and may provide a promising avenue for future approaches to xenotransplantation.