Type 1 diabetes treatment using encapsulated allogeneic pancreatic islets has been pursued for more than two decades to accomplish immunosuppressive-free, glucose regulation. The implant site, the size of transplanted islets, the encapsulating configuration and the biomaterials used are some of the key factors for long-term graft success. However, analyzing these factors’ impact on islet viability is far from trivial. Thus, the experimental work might not fully encompass the physiological implications involved. In this study, we used a computational model of an encapsulated human pancreatic islet based on experimental data to examine the viability of the islet cells subjected to varying capsule thicknesses and environmental oxygen tensions. The simulation results suggest that viability is significantly compromised even in high oxygen tensions, impacting a higher percentage of \(\alpha \) -cells than \(\beta \) -cells. This modeling approach underscores the importance of considering the architectural details of simulated islets to assess the physiological implications of biomaterial encapsulation.