Type 1 diabetes affects one in every 400-600 children and adolescents in the US. Standard therapy with exogenous insulin is burdensome, associated with a significant risk of dangerous hypoglycemia, and only partially efficacious in preventing the long term complications of diabetes. Pancreatic islet transplantation has emerged as a promising therapy for type 1 diabetes. However, this cell-based therapy is significantly limited by inadequate islet supply (more than one donor pancreas is needed per recipient), instant blood-mediated inflammatory reaction, and loss of islet viability/function during isolation and following implantation. In particular, inadequate revascularization of transplanted islets results in reduced islet viability, function, and engraftment. Delivery of provascularization factors has been shown to improve vascularization and islet function, but these strategies are hindered by insufficient and/or complex release pharmacokinetics and inadequate delivery matrices as well as technical and safety considerations. We hypothesized that controlled presentation of angiogenic cues within a bioartificial matrix could enhance the vascularization, viability, and function of transplanted islets. The primary objective of this dissertation was to enhance allogenic islet engraftment, survival and function by utilizing synthetic hydrogels as engineered delivery matrices. Polyethylene glycol (PEG)-maleimide hydrogels presenting cell adhesive motifs and vascular endothelial growth factor (VEGF) were designed to support islet activities and promote vascularization in vivo. We analyzed the material properties and cytocompatibility of these engineered materials, islet engraftment in an allotransplantation model, and glycemic control in diabetic subjects. The rationale for this project is to establish novel biomaterial strategies for islet delivery that support islet viability and function via the induction of local vascularization.