Encapsulation of islets within an immunoprotective hydrogel barrier offers a promising alternative to systemic immune suppression therapy currently required for successful transplantation of insulin-producing cells. However, encapsulation eliminates the opportunity for re-vascularization of islets upon implantation. As a result, cells located in the interior region of encapsulated islets that previously received nutrients and regulated blood glucose levels through local in vivo vasculature must rely on the diffusion of critical molecules through the islet mass. To minimize issues related to diffusional length scales, intact murine islets were dispersed with enzyme-free dissociation buffer. This yielded individual cells that were then allowed to form smaller, islet-derived cell aggregates. The process of re-aggregation was conducted over one week, and aggregation phenomena observed depending upon culture conditions. Aggregates were formed in both static culture and by incubating on an orbital shaker. In addition, the effects of cell concentration and media serum content on aggregation behavior were investigated. The survival of re-aggregated cells was monitored with culture time via fluorescent viability staining, and the function of aggregated cells was assessed by glucose-stimulated insulin secretion. Both survival and function of islet-derived aggregates were compared to that of intact islets. Additionally, the architecture of islet-derived cell aggregates, specifically the localization of individual cell types, was observed by immunohistochemistry and compared to that of intact islets. Finally, viable re-aggregated islet cells were photoencapsulated in poly(ethylene glycol) hydrogels. Glucose-stimulated insulin secretion by encapsulated cell aggregates was compared to that by encapsulated, intact islets. The effects of aggregation culture conditions and encapsulation on the applicability of islet-derived cell aggregates for transplantation will be discussed.