The replacement of insulin-producing beta cells by islet transplantation can efficiently reverse diabetes. The recent improvements in clinical results were made possible by transplanting higher islet masses and through the introduction of new immunosuppressive protocols that avoid diabetogenicity. The need for alternatives to continuous immunosuppression, and an unlimited source of glucose-sensitive, insulin-secreting tissue, is emerging. In this review we discuss the various key steps in islet transplantation and offer perspectives for future developments in the replacement of insulin-producing beta cells for the treatment of type I diabetes.