A method of forming an implantable and retrievable immunoisolatory vehicle is disclosed, the method comprising the steps of first forming a jacket of biocompatible thermoplastic or hydrogel, and then loading the jacket with a core comprising a volume of at least 1 .mu.l and at least 10.sup.4 cells capable of secreting a biocompatible matrix comprising a hydrogel or extracellular matrix, said jacket having a molecular weight cutoff permitting passage of molecules thereacross to provide said biologically active product or said function.