Isolated islets can provide a source of tissue for research, transplantation, and drug discovery to develop therapies for diabetes. Empirical modeling of islet diffusion barriers demonstrated that only the outermost layers of cells were exposed to glucose and sufficient oxygen levels, resulting in core cell death. Islets under a diameter of 100 μm exhibited a lower diffusion barrier, superior survival rates, and improved functional properties. Utilizing these observations, we engineered optimal islets by dispersing them into single cells and reaggregating them over several days in a micromold. These custom-designed micromolds contained conical-shaped recesses that enhanced reaggregation of cells into a defined geometry. The engineered islets, or Kanslets, were all under 100 μm in diameter, and had the same general cellular composition as native islets. Kanslets continued to produce new insulin molecules and had microvilli on the islet surface, much like native islets. The engineered islets had a statistically higher viability (percent of live cells), and increased glucose diffusion compared to native islets. In addition, they remained responsive to varying glucose levels by secreting insulin. When transplanted into diabetic rats, engineered islets performed reduced random blood glucose to normal levels within 48 h. Optimally, engineering islets may be a suitable alternative to utilizing native, isolated islet tissue for a variety of applications. Reaggregating tissue in an optimized manner using our engineered micromold approach has immense impact for three-dimensional tissue production and its subsequent use in research, drug discovery, and the clinic.