Macroencapsulation technology has been an attractive topic in the field of treatment for Type 1 diabetes due to mechanical stability, versatility, and retrievability of the macro-capsule design. Macro-capsules can be categorized into extravascular and intravascular devices, in which solute transport relies either on diffusion or convection, respectively. Failure of macroencapsulation strategies can be due to limited regenerative capacity of the encased insulin-producing cells, sub-optimal performance of encapsulation biomaterials, insufficient immunoisolation, excessive blood thrombosis for vascular perfusion devices, and inadequate modes of mass transfer to support cell viability and function. However, significant technical advancements have been achieved in macroencapsulation technology, namely reducing diffusion distance for oxygen and nutrients, using pro-angiogenic factors to increase vascularization for islet engraftment, and optimizing membrane permeability and selectivity to prevent immune attacks from host's body. This review presents an overview of existing macroencapsulation devices and discusses the advances based on tissue-engineering approaches that will stimulate future research and development of macroencapsulation technology. Biotechnol. Bioeng. 2016;113: 1381-1402. (c) 2015 Wiley Periodicals, Inc.