Viable mammalian cells are encapsulated in a polymeric membrane to form microencapsulated beads ready for introduction into a host body. The polymeric membrane allows passage therethrough of cell substrates and secretions, but prevents passage of larger molecules such as proteinaceous antibodies. In this way viable cells secreting essential products such as pancreatic islet cells secreting insulin can be transplanted into a host, and be protected against the immune reactions of the antibodies of the host which would otherwise reject the foreign cells. The cells are encapsulated from suspension in a non-solvent such as PPG, by addition thereto of a solution of a polymer (e.g. an acrylic/methacrylic acid esters copolymer) in dimethylsulfoxide. The polymer precipitates onto the cells to encapsulate them, and the supernatants are removed.