Transplantation of pancreatic islets is considered a therapeutic option for patients with type 1 diabetes mellitus who have life-threatening hypoglycaemic episodes. After the procedure, a decrease in the frequency and severity of hypoglycaemic episodes and sustained graft function as indicated by detectable levels of C-peptide can be seen in the majority of patients. However, true insulin independence, if achieved, usually lasts for at most a few years. Apart from the low insulin independence rates, reasons for concern regarding this procedure are the side effects of the immunosuppressive therapy, allo-immunization, and the high costs. Moreover, whether islet transplantation prevents the progression of diabetic microand macrovascular complications is largely unknown. Areas of current research include the development of less toxic immunosuppressive regimens, the control of the inflammatory reaction immediately after transplantation, the identification of the optimal anatomical site for islet infusion, and the possibility to encapsulate transplanted islets to protect them from the allo-immune response. At present, pancreatic islet transplantation is still an experimental procedure, which is only indicated for a highly selected group of type 1 diabetic patients with life-threatening hypoglycaemic episodes.