Islet cell transplantation (ICTx) is one of the most effective treatments for type 1 diabetes and is less invasive compared to whole organ transplantation. The US has been the leader in the research and clinical applications of ICTx for the last 40 years. ICTx requires complex procedures, including pancreas procurement and preservation; pancreas digestion; islet purification; and transplantation. Even with the dramatic progresses in each of the procedures listed above, there are still challenges to make ICTx the standard therapy. These challenges are: (1) obtaining enough islets from a single donor and (2) preventing graft loss due to allogenic rejection and recurrence of autoimmune islet destruction. A new preservation strategy for pancreata and pancreatic ducts using ET-Kyoto solution as well as a new islet purification method using iodixanol has substantially improved islet yields. Continuous research to improve the efficacy of islet isolation will solve the issue of obtaining enough islets from a single donor. Immunological tolerance is an ideal solution for the issue of rejection and autoimmune recurrence and a regulatory T cell strategy seems promising. Moreover, the SUITO index is a simple and powerful tool to assess engrafted islet mass and is, therefore, useful for evaluating the efficacy of new immunosuppressant strategies. Once ICTx becomes a standard treatment, the donor shortage will become the next challenge. Marginal or living donor islet transplantations could help alleviate this issue; however, bio-artificial islet transplantation with animal islets could be the ultimate solution.