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The goal of this study was to determine whether porcine islets encapsulated in hollow fibers made of AN69 copolymer can correct hyperglycemia in diabetic mice and provide normal tolerance to a glucose challenge. In vitro perifusion of hollow fibers demonstrated the rapid kinetics of insulin release in response to glucose. Two fibers containing islets were transplanted into the peritoneal cavity of each of 17 streptozotocin induced diabetic mice. In 11 mice, diabetes was reversed within 3 days with plasma glucose levels decreasing from 19.7 ± 0.9 (mean ± SEM) before implantation to 10.9 ± 0.8 mmol/L. Intraperitoneal glucose tolerance tests were performed in transplanted (n = 7), nondiabetic (n = 15), and diabetic mice (n- 6). A normal glucose pattern was observed in the transplanted diabetic mice. This was achieved in the presence of plasma insulin levels lower than those observed in control nondiabetic mice, suggesting the presence of a state of hypersensitivity to insulin, which was demonstrated in this model by exogenous insulin tolerance tests. In conclusion, encapsulation of islets suspended in ultraculture medium in biocompatible membranes of AN69 can provide xenograft survival, and complete normalization of glucose tolerance can be achieved.