A method for processing and embedding alginate-polylysine microencapsulated pancreatic tissue in glycol methacrylate resin (GMA) is described. Fixation in 4% phosphate buffered formaldehyde, processing in ascending concentrations of glycol methacrylate monomer and embedding in Technovit 7100 results in well preserved morphological details of hydrogels, hydrogel-cell interfaces, and encapsulated pancreatic tissue. Routine staining with Loeffler's methylene blue, hematoxylin and eosin, and Romanovsky-Giemsa gave excellent images of the GMA embedded alginate polylysine membrane and tissues allowing cells on the outside of the capsule to be analyzed effectively as part of the foreign body reaction against the capsule membrane.