Transplantation of allogeneic pancreatic islets is an effective approach to treat type 1 diabetes. To bypass the need for systemic administration of immunosuppression drugs following transplantation, approaches to genetically modify allogeneic islets to express anti-inflammatory, immunosuppressive, or antiapoptotic proteins prior to transplantation are being developed. Adeno-associated viral (AAV) based vectors have been used for gene transfer to islets, but the efficiency of functional transduction is low. Recently, double-stranded (ds) or double-copy (dc) based AAV vectors have been developed that allow for more rapid and efficient AAV-mediated transgene expression following transduction. Here we demonstrate that intact human and murine islets can be transduced with dsAAV2-eGFP efficiently compared to single-stranded AAV2-eGFP. Furthermore, our results demonstrate that murine islets transduced with dsAAV2-eGFP have normal islet glucose responsiveness, viability, and islet insulin content. Transplantation of the dsAAV2-eGFP transduced islet restored normal glycemia in diabetic mice without eliciting an immune response. Significant dsAAV2-mediated eGFP expression was observed in the islet grafts for at least 6 months post-transplant. Finally, we demonstrated that dsAAV serotypes 2, 6, and 8 infect human islets efficiently. Taken together, these results suggest that dsAAV based vectors are highly appropriate for gene transfer to islets to facilitate transplantation.