Cell therapy is likely to succeed clinically if cells survive at the transplantation site and are protected against immune rejection. We hypothesized that this could be achieved with intrasplenic transplantation of encapsulated cells because the cells would have instant access to oxygen and nutrients while being separated from the host immune system. In order to provide proof of the concept, primary rat hepatocytes and human hepatoblastoma-derived HepG2 cells were used as model cells. Rat hepatocytes were encapsulated in 100-kDa hollow fibers and cultured for up to 28 days. Rat spleens were implanted with hollow fibers that were either empty or contained 1 × 10 7 rat hepatocytes. Human HepG2 cells were encapsulated using alginate/poly-l-lysine (ALP) and also transplanted into the spleen; control rats were transplanted with free HepG2 cells. Blood human albumin levels were measured using Western blotting and spleen sections were immunostained for albumin. Hepatocytes in monolayer cultures remained viable for only 6–10 days, whereas the cells cultured in hollow fibers remained viable and produced albumin throughout the study period. Allogeneic hepatocytes transplanted in hollow fibers remained viable for 4 weeks (end of study). Free HepG2 transplants lost viability and function after 7 days, whereas encapsulated HepG2 cells remained viable and secreted human albumin at all time points studied. ALP capsules, with or without xenogeneic HepG2 cells, produced no local fibrotic response. These data indicate that intrasplenic transplantation of encapsulated cells results in excellent survival and function of the transplanted cells and that the proposed technique has the potential to allow transplantation of allo- and xenogeneic cells (e.g., pancreatic islets) without immunosuppression.