Over the last two decades, pancreatic islet transplantations have become a promising treatment for Type I diabetes. However, although providing a consistent and sustained exogenous insulin supply, there are a number of limitations hindering the widespread application of this approach. These include the lack of sufficient vasculature and allogeneic immune attacks after transplantation, which both contribute to poor cell survival rates. Here, these issues are addressed using a biofabrication approach. An alginate/gelatin-based bioink formulation is optimized for islet and islet-related cell encapsulation and 3D printing. In addition, a custom-designed coaxial printer is developed for 3D printing of multicellular islet-containing constructs. In this work, the ability to fabricate 3D constructs with precise control over the distribution of multiple cell types is demonstrated. In addition, it is shown that the viability of pancreatic islets is well maintained after the 3D printing process. Taken together, these results represent the first step toward an improved vehicle for islet transplantation and a potential novel strategy to treat Type I diabetes.