Although transplantations of vascularized pancreas in diabetic patients show steadily improving results, the immediate operative risks and life-long immunosuppressive medication involved represent considerable disadvantages. Efforts are being made to develop simpler and safer methods of transplantation with isolated pancreatic islet grafts, e.g., isolated islets, fetal pancreas, or dispersed adult pancreas. Iso-, allo-, and xenografts of such preparations have been shown to reverse diabetes in animals. However, attempts to apply these techniques in clinical practice have remained largely unsuccessful, and major technical advances are needed before success is achieved. Attempts to use whole, segmented, or isolated islets from pancreatic grafts as a cure for diabetes in animals and in diabetic patients are reviewed. The importance to the graft's permanent function, of adequate preparation and storage of the graft, and of beta-cell growth and vascularization are reviewed. Various forms of immunomodulation by pretreatment of grafts in vitro have been employed in animal models of diabetes, but none of these have yet been employed with long-term success in humans. Recurrence of a specific autoimmune response toward the beta-cell in a spontaneously diabetic recipient is a potential mechanism for destruction of transplanted islet tissue.