Islet transplantation is a promising treatment for Type 1 diabetes; however limitations of the intra-portal site and poor revascularization of islets must be overcome. We hypothesize that engineering a highly vascularized collagen-based construct will allow islet graft survival and function in alternative sites. In this study, we developed such a collagen-based biomaterial. Neonatal porcine islets (NPIs) were embedded in collagen matrices crosslinked with 1-ethyl-3-(3-dimethylaminopropyl) carbodiimide and N-hydroxysuccinimide containing combinations of chondroitin-6-sulfate, chitosan, and laminin, and compared with controls cultured in standard media. Islets were examined for insulin secretory activity after 24 h and 4 d and for apoptotic cell death and matrix integrity after 7 d in vitro. These same NPI/collagen constructs were transplanted subcutaneously in immunoincompetent B6.Rag−/− mice and then assessed for islet survival and vascularization. At all time points assessed during in vitro culture there were no significant differences in insulin secretory activity between control islets and those embedded in the collagen constructs, indicating that the collagen matrix had no adverse effect on islet function. Less cell death was observed in the matrix with all co-polymers compared with the other matrices tested. Immunohistochemical analysis of the grafts post-transplant confirmed the presence of intact insulin-positive islets; grafts were also shown to be vascularized by von Willebrand factor staining. This study demonstrates that a collagen, chondroitin-6-sulfate, chitosan, and laminin matrix supports islet function in vitro and moreover allows islet survival and vascularization post-transplantation; therefore, this bio-engineered vascularized construct is capable of supporting islet survival.