Despite the recent achievements in cell-based therapies for curing type-1 diabetes (T1D), capillarization in beta (β)-cell clusters is still a major roadblock as it is essential for long-term viability and function of β-cells in vivo. In this research, we report sprouting angiogenesis in engineered pseudo islets (EPIs) made of mouse insulinoma βTC3 cells and rat heart microvascular endothelial cells (RHMVECs). Upon culturing in three-dimensional (3D) constructs under angiogenic conditions, EPIs sprouted extensive capillaries into the surrounding matrix. Ultra-morphological analysis through histological sections also revealed presence of capillarization within EPIs. EPIs cultured in 3D constructs maintained their viability and functionality over time while non-vascularized EPIs, without the presence of RHMVECs, could not retain their viability nor functionality. Here we demonstrate angiogenesis in engineered islets, where patient specific stem cell-derived human beta cells can be combined with microvascular endothelial cells in the near future for long-term graft survival in T1D patients.