A new method is described for encapsulation of living cells. PC12 rat adrenal pheochromocytoma cells, which have been shown to synthesize, store and release dopamine were employed. The particles are made first and the cells then incorporated in a gentle mechanical procedure. The morphology (by light and electron microscopic observation), stability, rheology, texture and permeability of these microcapsules provided by Kappa Biotech were investigated. Membrane permeability studies demonstrated exclusion of 69 000 Da human serum albumin, but equilibrium of D-glucose and inulin was within 24 h, indicating a molecular weight cut-off in the 5000-70 000 Da range. The viability and the function of the encapsulated cells were evaluated by measuring the spontaneous release of dopamine by high performance liquid chromatography with electrochemical detection. The results show that dopamine-secreting cells can be sequestered in a semi-permeable capsule and still display good viability and proliferation for at least 1 month.