Transplantation of human pancreatic isolated islets can restore beta-cell function but it requires chronic immunosuppression. The outcome of islet transplantation mainly depends on both the quality of islet preparations, and the survival of the graft. The quality of islet preparations can be evaluated by the results of isolation, which determines the chance to achieve insulin independence. The survival of islet grafts is reflected by the amount of engrafted functional tissue that maintains metabolic control. Immunosuppressive therapy prevents the immunological rejection of grafts, but impairs their function and impedes their regenerative capacity. Therefore, the selection of high quality islet preparations and the reduction of toxic effects of immunosuppressive regimens might dramatically improve the outcomes. The application of stem cell therapy in islet transplantation may contribute to a better understanding of the mechanisms responsible for tissue homeostasis and immune tolerance. Xenogeneic islets may serve as an unlimited source if immune tolerance can be achieved. This may be a strategy to enable a substantial improvement in function while overcoming potentially deleterious risks.