The long-term complications of insulin-dependent diabetes mellitus have become a major health care problem, and it is now clear that they arise from inadequate homeostatic control of blood glucose by injected replacement insulin. Transplantation of pancreatic islets is arguably the most logical approach to restoring metabolic homeostasis in people with diabetes. This review looks at the current status of human islet transplantation and the problems that remain. These include: (1) the limited supply of human islet tissue available for transplantation; (2) the adverse effects of current immunosuppressive protocols on diabetic patients; (3) the problems of primary nonfunction of the transplanted islets; (4) the rejection of islets; and (5) the recurrence of autoimmune diabetic disease. Some of the approaches that might solve these problems are then examined: (1) immune modulation to reduce or prevent immune attack by the recipient's immune system; (2) immunoisolation to prevent recognition of the islet graft; (3) induction of tolerance; (4) xenotransplantation using islets derived from animals; and (5) gene therapy.