Covalent attachment of polymers to cells and tissues could be used to solve a variety of problems associated with cellular therapies. Insulin-dependent diabetes mellitus is a disease resulting from the autoimmune destruction of the beta cells of the islets of Langerhans in the pancreas. Transplantation of islets into diabetic patients is an attractive form of treatment, provided that the islets could be protected from the host's immune system to prevent graft rejection, and smaller numbers of islets transplanted in smaller volumes could be sufficient to reverse diabetes. Therefore, a need exists to develop islet encapsulation strategies that minimize transplant volume. In this study, we demonstrate the formation of nano-thin, poly(ethylene glycol) (PEG)-rich functional conformal coatings on individual islets via layer-by-layer assembly technique. The surface of the islets is modified with biotin-PEG-N-hydroxysuccinimide (NHS), and the islets are further covered by streptavidin (SA) and biotin-PEG-peptide conjugates using the layer-by-layer method. An insulinotropic ligand, glucagon-like peptide-1 (GLP-1), is conjugated to biotin-PEG-NHS. The insulinotropic effect of GLP-1 is investigated through layer-by-layer encapsulation of islets using the biotin-PEG-GLP-1 conjugate. The effect of islet surface modification using the biotin-PEG-GLP-1 conjugate on insulin secretion in response to glucose challenge is compared via static incubation and dynamic perifusion assays. The results show that islets coated with the functional PEG conjugate are capable of secreting more insulin in response to high glucose levels compared to control islets. Finally, the presence of SA is confirmed by indirect fluorescent staining with SA-Cy3, and the presence of PEG-peptide on the surface of the islets after treatment with biotin-PEG-GLP-1 is confirmed by indirect fluorescent staining with biotin-PEG-fluorescein isothiocyanate (FITC) and separately with an anti-GLP-1 antibody. This work demonstrates the feasibility of treating pancreatic islets with reactive polymeric segments and provides the foundation for a novel means of potential immunoisolation. With this technique, it may be possible to encapsulate and/or modify islets before portal vein transplantation and reduce transplantation volume significantly, and promote islet viability and insulin secretion due to the presence of insulinotropic peptides on the islet surface. Layer-by-layer self-assembly of PEG-GLP-1 offers a unique approach to islet encapsulation to stimulate insulin secretion in response to high glucose levels.