This photograph has been reproduced many times and claimed by many people. It was made by Dr. Ming Chen of the University of Alberta at Edmonton. (Click here to fisit Dr. Chen's web site.) The micrograph "The Encapsulated Islet" won an award from the Microscopical Society of Canada.
The islet was isolated by Prof. Ray Rajotte's group at the University of Alberta. The encapsulation was performed by Randy Dorian working with Kent Cochrum's group at the University of California Davis. I remember we first saw this at a Science Advisory Board meeting in 1993.
Interestingly, the method used to make it was a dead end. The initial alginate coating was done with the Dorian electrostatic droplet former. Polylysine was added then the interior dissolved with citrate; the liquid alginate formed salt bonds with the polylysine, making the observed shell. The broken shell allowing the islet to be seen makes for a striking image. But actually the islets prefer to be surrounded and touched by hydrogel.