Pancreatic islet transplantation continues to benefit patients with type 1 diabetes by normalizing glucose metabolism and improving other complications of diabetes. However, islet transplantation therapy is limited by the inadequate availability of pancreatic islets. In order to address this concern, this work investigated the expansion of rat insulinoma cells (INS-1) and their ability to generate insulin in a hollow fiber bioreactor (HFB). The long-term goal of this project is to develop a bioartificial pancreas. HFBs were incubated at two different oxygenation conditions (10% and 19% O-2) to determine the best scenario for O-2 transport to cultured cells. Also, bovine hemoglobin (BvHb) was supplemented in the cell culture media of the HFBs in order to increase O-2 transport under both oxygenation conditions. Our results show that INS-1 cells expanded under all oxygenation conditions after 2 weeks of culture, with a slightly higher cell expansion under normoxic oxygenation (19% O-2) for both control HFBs and BvHb HFBs. In addition, cellular insulin production remained steady throughout the study for normoxic control HFBs and BvHb HFBs, while it increased under hypoxic oxygenation (10% O-2) for both types of HFBs but to different extents. Under the two different oxygenation conditions, cellular insulin production was more uniform with time in BvHb HFBs versus control HFBs. These results, along with qRT-PCR analysis, suggest a possible dysregulation of the insulin-signaling pathway under hypoxic culture conditions. In conclusion, the HFB culture system is an environment capable of expanding insulinomas while maintaining their viability and insulin production capabilities. Biotechnol. Bioeng. 2010; 107: 582-592. (C) 2010 Wiley Periodicals, Inc.