Phase-inversion membranes formed from poly(acrylonitril-co-vinylchloride) (PAN-PVC) have been utilized for encapsulating living cells for transplantation; however a detailed analysis of the structure and function of the integral skin layer has not been reported. PAN-PVC membranes fabricated under different precipitation conditions were analyzed using microscopic techniques and several functional tests. Structural analysis with scanning atomic force microscopy (AFM) revealed the presence of nodular elements in the skin layer which changed as a function of precipitation conditions. In addition, membrane hydraulic permeabilities, sieving coefficients, and diffusive permeabilities also Varied with precipitation conditions. Furthermore, changes in the functional properties could be related to the size of the nodular elements and their accompanying interstitial space. The results provide insight into the fundamental interrelationships that exist between membrane fabrication, the fine surface morphology of the skin layer, and membrane performance.