Although type 1 diabetes cannot be prevented or reversed, replacement of insulin production by transplantation of the pancreas or pancreatic islets represents a definitive solution. At present, transplantation can restore euglycemia, but this restoration is short-lived, requires islets from multiple donors, and necessitates lifelong immunosuppression. An emerging paradigm in transplantation and autoimmunity indicates that systemic inflammation contributes to tissue injury while disrupting immune tolerance. We identify multiple barriers to successful islet transplantation, each of which either contributes to the inflammatory state or is augmented by it. To optimize islet transplantation for diabetes reversal, we suggest that targeting these interacting barriers and the accompanying inflammation may represent an improved approach to achieve successful clinical islet transplantation by enhancing islet survival, regeneration or neogenesis potential, and tolerance induction. Overall, we consider the proinflammatory effects of important technical, immunological, and metabolic barriers including: 1) islet isolation and transplantation, including selection of implantation site; 2) recurrent autoimmunity, alloimmune rejection, and unique features of the autoimmune-prone immune system; and 3) the deranged metabolism of the islet transplant recipient. Consideration of these themes reveals that each is interrelated to and exacerbated by the other and that this connection is mediated by a systemic inflammatory state. This inflammatory state may form the central barrier to successful islet transplantation. Overall, there remains substantial promise in islet transplantation with several avenues of ongoing promising research. This review focuses on interactions between the technical, immunological, and metabolic barriers that must be overcome to optimize the success of this important therapeutic approach.