Cell microencapsulation continues to hold significant promise for biotechnology and medicine. The controlled, and continuous, delivery of therapeutic products to the host by immunoisolated cells is a potentially cost-effective method to treat a wide range of diseases. Although there are several issues that need to be addressed, including capsule manufacture, properties and performance, in the past few years, a stepwise analysis on the essential obstacles and limitations has brought the whole technology closer to a realistic proposal for clinical application. This paper summarizes the current situation in the cell encapsulation field and discusses the main events that have occurred along the way.