The term "immunoisolation" refers to the encapsulation of a graft in a selectively permeable membrane. Encapsulation of cellular grafts may provide a way to protect the graft from immune attack without the need for immunosuppressive agents. Although numerous types of artificial materials have been used for encapsulating membranes, their incomplete biocompatibility causes foreign body reaction against the membranes. A new technique has been developed, called cell sheet engineering using temperature-responsive culture dishes, that allows the use of living cells as an immunoisolating membrane in this study. Using this method, the cultured cells can be easily harvested in the shape of a sheet by a simple change of the temperature without the use of proteolytic enzymes. A cell sheet can be created with three-dimensional structure by making multiple cell sheet layers. In this study, a new technique of macroencapsulation (bioartificial organs) has been developed using chondrocyte sheets. Among the various candidate cells, pancreatic islet cells were selected for a bioartificial organ in this study. A chondrocyte sheeting immunodelusive immunoisolated bioartificial pancreas (CSI-BAP) was manufactured by means of cell sheet engineering. An auricular cartilage, which is a histologically elastic cartilage from dogs (beagle), was used as a source of immunoisolating membrane. CSI-BAP was made by multilayering the chondrocyte sheets, and the donor's islets were located between each sheet. Islets were isolated and prepared from the dog (ALLO-model) and Brown Norway (BN) rat (XENO-model). The CSI-BAP was cultured for 83 days and the cultured medium was collected every 24 h to measure the insulin concentrations. The CSI-BAP was examined histologically using hematoxyhin and eosin (H&E), and azan dye staining. In addition, immunohistochemical staining was performed to demonstrate the insulin production of CSI-BAP. Insulin secretion of CSI-BAP on day 16 was reduced to 21.4% of the insulin secretion level of day 10, which was the start point of measurement. Although a gradual reduction was observed, insulin secretion was maintained for 3 months. The CSI-BAP was capable of secreting insulin to the culture medium during the observation period. Histological evaluations demonstrated the good viability of the islets, and immunohistochemistry showed the positive staining of insulin. This novel technology may be used for other kinds of endocrine cells or hepatocytes, which may become the models for immunoisolated bioartificial organs in the near future.