We report the encapsulation of MIN6 cells, a pancreatic beta-cell line, using thermally induced gelable materials. This strategy uses aqueous solvent and mild temperatures during encapsulation, thereby minimizing adverse effects on cell function and viability. Using a 2.1 mixture of PNIPAAm-PEG-PNIPAAm tri-block copolymer and PNIPAAm homopolymer that exhibit reversible sol-to-gel transition at similar to 30 degrees C, gels were formed that exhibit mechanical integrity, and are stable in H2O, PBS and complete DMEM with negligible mass loss at 37 degrees C for 60 days. MTT assays showed undetectable cytotoxicity of the polymers towards MIN6 cells. A simple microencapsulation process was developed using vertical co-extrusion and a 37 degrees C capsule collection bath containing a paraffin layer above DMEM. Spherical capsules with diameters ranging from 500 to 900 mu m were formed. SEM images of freeze-dried capsules with PBS as the core solution showed homogenous gel capsule membranes. Confocal microscopy revealed that the encapsulated cells tended to form small aggregates over 5 days, and staining for live and dead cells showed high viability post-encapsulation. A static glucose challenge with day-5 cultured microencapsulated cells exhibited glucose-dependent insulin secretion comparable to controls of free MIN6 cells grown in monolayers. These results demonstrate the potential use of these thermo-responsive polymers as cell encapsulation membranes.