Pancreatic islet transplantation is a promising treatment option for Type 1 Diabetics, offering improved glycaemic control through restoration of insulin production and freedom from life-threatening hypoglycaemic episodes. Implementation of the Edmonton protocol in 2000, a glucocorticoid-free immunosuppressive regimen has led to improved islet transplantation success. >50% of islets are lost post-transplantation primarily through cytokine-mediated apoptosis, ischemia and hypoxia. Gene therapy presents a novel strategy to modify islets for improved survival post-transplantation. Current islet gene therapy approaches aim to improve islet function, block apoptosis and inhibit rejection. Gene transfer vectors include adenoviral, adeno-associated virus, herpes simplex virus vectors, retroviral vectors (including lentiviral vectors) and non-viral vectors. Adeno-associated virus is currently the best islet gene therapy vector, due to the vectors minimal immunogenicity and high safety profile. In animal models, using viral vectors to deliver genes conferring local immunoregulation, anti-apoptotic genes or angiogenic genes to islets can significantly improve islet survival in the early post-transplant period and influence long term engraftment. With recent improvements in gene delivery and increased understanding of the mechanisms underlying graft failure, gene therapy for islet transplantation has the potential to move closer to the clinic as a treatment for patients with Type 1 Diabetes.