Immunoisolatory vehicles having a core and a surrounding jacket are disclosed, the core having a volume in excess of 1 .mu.l and at least about 10.sup.4 living cells capable of secreting a biologically active product or of providing a biological function to a patient, the cells dispersed in a biocompatible matrix formed of a hydrogel or an extracellular matrix component, and the external jacket being permselective, biocompatible and having a molecular weight cutoff permitting passage of molecules between the patient and the core through said jacket to provide said biological product or function.