The involvement of interleukin-1 (IL-1) in inflammation, tumor growth, and metastasis makes it an attractive target for therapeutic intervention. Here, we show that a continuous delivery of a low, but steady-state level of the naturally occurring IL-1 receptor antagonist (IL-1Ra) reduced inflammatory responses and inhibited tumor development in mice, phenomena that are induced by IL-1, mainly secretable IL-1beta. The IL-1Ra was delivered from microencapsulated genetically engineered cells, which overexpress and secrete this mediator. For a tumor model, we used fibrosarcoma cell line, which secretes high levels of IL-1beta; when injected s.c. into mice, the cells developed into large tumors characterized by very active angiogenic patterns. The proangiogenic features of IL-1beta were manifested at low levels of the cytokine, and release of 25 ng per day of the IL-1Ra was needed to oppose its effects and inhibit tumor development. The continuous delivery of the IL-1Ra contributed to improved biocompatibility of the microencapsulated cell systems; the fibrotic sac surrounding the systems was much thinner with significantly less blood capillaries and inflammatory cells. Not only do our findings point to the antiangiogenic properties of IL-1Ra in inflammation and tumor growth, but they also provide a more efficient and convenient way for treating diseases involving IL-1.