A promising treatment of auto-immune juvenile diabetes is transplantation of beta islet cells. Islets can be encapsulated inside semi-permeable microcapsules to protect them against the patients’ immune system. Low islet survival and the lack of means to monitor the implants are major issues. We employed mixed-alginate gradient (MAG) microcapsules that better support human islet viability compared to currently used microcapsules. By labeling the capsules with clinically used agent CS-1000, we created MAG fluorocapsules which appeared as hot spots in mice on 19F MRI. MAG fluorocapsules offer a drug-free means to treat diabetic patients long-term while enabling imaging of transplanted islets.