A key limitation to the success of islet transplantation is islet cell exhaustion and cell death during islet isolation and following transplantation. Endoplasmic reticulum (ER) stress has been identified as an important mechanism in the development of β-cell dysfunction, cell death, and diabetes. This study investigated the role of ER stress in islet loss during human islet isolation and posttransplantation in a diabetic athymic mouse model. Islets were isolated from human organ donor pancreata using intraductal enzymatic dissociation and continuous density gradient purification. ER stress mediators were assessed by Western blot and by RT-PCR. Caspase-3 activity was quantified by a bioluminescent peptide cleavage assay. Normal and streptozotocin-treated diabetic nude mice were transplanted with 2,000 IEQ of human islets under the kidney capsule and the grafts were harvested 3 or 28 days after transplantation. The grafts were analyzed for the presence for ER stress signals by immunohistochemistry. Isolated islets demonstrated higher levels of ER chaperone Bip, ER stress mediators eIF2α, ATF, spliced XBP-1, and CHOP, and also ER stress-associated apoptotic signals like JNK, caspase-3/7, and cleaved PARP. Donor pancreatic tissue did not show expression of any of these ER stress mediators. After transplantation, low expression of only protective ER stress mediators was evident in the grafts from the normal recipients. In contrast, both protective and apoptotic ER stress mediators were highly expressed in the grafts of hyperglycemic mice. ER stress mediators were induced during islet isolation and may contribute to islet apoptosis and cell death. Islet isolation activates ER stress and apoptotic pathways in isolated islets. Hyperglycemia may prolong this ER stress signal in engrafted islets, converting the protective aspects of the ER stress response to a proapoptotic response and thus contribute to deterioration of β-cell function and survival.