Transplantation of microencapsulated islet cells remains a promising strategy for the normalization of glucose metabolism control in type 1 diabetes mellitus. However, vigorous host immunologic rejection, fibrotic overgrowth around the microcapsules and poor oxygen supply often lead to graft failure. Herein, a bioartificial pancreas is constructed that incorporates the “stealth effect” based on polyethylene glycol copolymers and the high oxygen‐carrying performance of fluorinated nanoparticles. Polycationic poly(L‐lysine)‐grafted‐poly(ethylene glycol) is successfully coated on the surface of alginate microcapsules through electrostatic interaction, which can not only resist fibrinogen adhesion and avoid excessive fibrosis around the microcapsules, but also isolate the host immune system from attacking, achieving a “stealth effect” of microencapsulated islet cells. Furthermore, the co‐loading of fluoride‐based O2 nanocarriers gives them enhanced oxygen‐carrying and continuous oxygen supply capabilities, thereby effectively prolonging the survival of islet cells. The intracapsular islet cells still display similar cell viability and almost normal insulin secretion function even in long‐term culture under hypoxic conditions. Collectively, this work opens up a new approach for microencapsulated islets to efficiently evade host immune attack and improve oxygen supply, and provides a promising strategy for islet transplantation in type 1 diabetes mellitus.This article is protected by copyright. All rights reserved