Antibody-mediated immune checkpoint blockade is a transformative immunotherapy for cancer. These same mechanisms can be repurposed for the control of destructive alloreactive immune responses in the transplantation setting. Here, we implement a synthetic biomaterial platform for the local delivery of a chimeric streptavidin/programmed cell death-1 (SA-PD-L1) protein to direct "reprogramming" of local immune responses to transplanted pancreatic islets. Controlled presentation of SA-PD-L1 on the surface of poly(ethylene glycol) microgels improves local retention of the immunomodulatory agent over 3 weeks in vivo. Furthermore, local induction of allograft acceptance is achieved in a murine model of diabetes only when receiving the SA-PD-L1-presenting biomaterial in combination with a brief rapamycin treatment. Immune characterization revealed an increase in T regulatory and anergic cells after SA-PD-L1-microgel delivery, which was distinct from naïve and biomaterial alone microenvironments. Engineering the local microenvironment via biomaterial delivery of checkpoint proteins has the potential to advance cell-based therapies, avoiding the need for systemic chronic immunosuppression.