Methods of treating and forming biocompatible microcapsules that containliving cells are provided, to improve the function of the microcapsules. Inparticular, methods of treating islet cells or microcapsules containing isletcells are provided. Culture of isolated islet cells prior to encapsulation,culture of encapsulated cells, and cryopreservation of islet cells prior toencapsulation, are described. Methods for harvesting viable islets thatincorporates an anti-oxidant in the digestion medium are also disclosed.