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‐1β. 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‐1β; when injected s.c. into mice, the cells developed into large tumors characterized by very active angiogenic patterns. The proangiogenic features of IL‐1β 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.