Islet transplantation offers a physiological approach for precise restoration of glucose homeostasis, thereby reversing the metabolic and neurovascular complications of diabetes. In the past, there were only a few successes with human islet transplantation and the initial results were very disappointing. However, recent reports of great successes in islet transplantation have renewed the interest in it as a possible therapeutic option for patients with type 1 diabetes. Scientists have been focusing on methods to improve the outcome of islet transplantation. The shortage of human donor pancreata has led to many efforts to expand the human donor pool, modify islet processing and preservation methods, and search for alternative islet sources. To solve the problems of islet engraftment, treating recipients during the peritransplant period with additional islets, exogenous insulin, hyperbaric oxygen, pentoxyphylline, 15-deoxyspergualin, pravastatin and nordihydroguaiaretic acid have all shown to be beneficial for the islet grafts and transplantation results. Immunomodulation and immunoisolation of donor cells have been used to overcome immunological problems, and recently, newer immunosuppressants and agents to induce tolerance have also become available. Patients with successful islet transplantations showed near normal glycemia with no hypoglycemic episode. These patients exhibited normal hepatic glucose production and improved tissue glucose disposal, despite the persistence of blunted first phase insulin peaks. The transplantation-related complications involved primarily the procedure itself and the drugs used for immunosuppression. In conclusion, islet transplantation will become a routine treatment in clinical practice once more islet sources and safer forms of immunosuppression are obtained.