Recent advances in clinical protocols have improved the outcomes of pancreatic islet transplantation (PIT), yet PIT recipients typically require pancreatic islet grafts derived from multiple donors to achieve insulin independence. This along with experimental models of syngeneic PIT, showing that up to 60% of pancreatic islet tissue undergoes apoptosis within the first several days post-transplantation, strongly suggest the involvement of nonalloantigen-specific, inflammatory events in partial destruction of the graft following PIT. Interleukin-1beta appears to be among the most important inflammatory mediators, causing pancreatic islet dysfunction and apoptosis through the up-regulation of inducible nitric oxide (NO) synthase and cyclooxygenase-2. Kupffer cells secrete many molecules, including cytokines, NO, and free radicals, which are known to be directly toxic to the pancreatic islets, and depletion or inhibition of Kupffer cells improves outcomes following experimental PIT. Immediately after transplantation, the pancreatic islets are perfused only by portal vein blood until the process of angiogenesis restores arterial blood flow some 7-10 days later. This delayed vascularization may have implications for the expression of leukocyte adhesion molecules, the effects of free radicals, and the role of ischemia-reperfusion injury. Finally, in the immediate post-transplant period, hepatocytes may contribute to pancreatic islet injury through the production of NO. This paper reviews literature regarding the inflammatory events that follow PIT as well as the pathogenesis of diabetes and the pathophysiology of hepatic ischemia-reperfusion and their relation to the survival and function of intrahepatic pancreatic islet grafts.