Insulin-dependent diabetes mellitus (IDDM) is a disease caused by a progressive autoimmune destruction of the insulin-producing beta-cells within the pancreas. A major task of diabetes research consists in developing new forms of treatment to delay or prevent the development of the chronic complications associated with the disease. Islet transplantation could become an attractive alternative to whole organ transplantation, since it is a simpler and safer procedure. However, the requirement for long-term immunosuppression has limited the indication of islet transplantation to patients receiving a simultaneous kidney transplant or already bearing one. While the majority of recipients of islet allografts did not become insulin independent, the field has witnessed significant progress and the long-term results in patients with even partial graft function are comparable or better than those achievable with intensive insulin therapy. Recent trials of donor bone marrow infusions combined with solid organ transplants are in progress to determine whether donor-specific tolerance can be achieved with the potential to expand the future indications of islet transplantation in diabetes.