In the light of results of clinical trials with immunoisolated human parathyroid tissue Ba2+-alginate capsules were developed that meet the requirements for long-term immunoisolated transplantation of (allogeneic and xenogeneic) cells and tissue fragments. Biocompatibility of the capsules was achieved by subjecting high-M alginate extracted from freshly collected brown algae to a simple purification protocol that removes quantitatively mitogenic and cytotoxic impurities without degradation of the alginate polymers. The final ultra-high-viscosity, clinical-grade (UHV/CG) product did not evoke any (significant) foreign body reaction in BB rats or in baboons. Similarly, the very sensitive pERK assay did not reveal any mitogenic impurities. Encapsulated cells also exhibited excellent secretory properties under in vitro conditions. Despite biocompatible material, pericapsular fibrosis is also induced by imperfect capsule surfaces that can favor cell attachment and migration under the release of material traces. This material can interact with free end monomers of the alginate polymers under formation of mitogenic advanced glycation products. Smooth surfaces, and thus topographical biocompatibility of the capsules (visualized by atomic force microscopy), can be generated by appropriate crosslinking of the UHV/CG-alginate with Ba2+ and simultaneous suppression of capsule swelling by incorporation of proteins and/or perfluorocarbons (i.e., medically approved compounds with high oxygen capacity). Perfluorocarbon-loaded alginate capsules allow long-term non-invasive monitoring of the location and the oxygen supply of the transplants by using 19F-MRI. Transplantation studies in rats demonstrated that these capsules were functional over a period of more than two years.