Clinical islet transplantation, the intrahepatic infusion of allogeneic islets, has the potential to provide physiological blood glucose control for insulin-dependent diabetics. The success of clinical islet transplantation, however, is significant hindered by the strong inflammatory and immunological responses to the transplant, in spite of systemic immunosuppression. To address these challenges, our laboratory has focused on engineering biomaterials that serve to modulate immunological responses at the implant site. This can be achieved by designing biomaterials that serve to: immuno-camouflage the transplant via encapsulation; generate a local immunosuppressive graft site via local drug delivery; and/or present surface-mediated tolerogenic signals to peripheral immune cells. A summary of these approaches to extend the duration of foreign cellular grafts via local modulation of host immune cells towards desirable tolerogenic phenotypes will be presented herein.