Islet transplantation is an attractive concept for the treatment of Type 1 diabetes because of its potential high efficacy and minimal invasion to patients. The treatment may effectively control blood glucose for brittle Type 1 diabetes, resulting in a marked reduction in hypoglycemic episodes and improvements in HbA1c. In addition, approximately 70% of transplanted Type 1 diabetic patients have achieved insulin independence. However, there are still important issues to be addressed before this treatment is widely applicable, including difficulty in maintaining insulin independence, low islet isolation success rate, multiple donor requirements, and side effects associated with the use of immunosuppressants. Donor shortage is another dilemma. To address the issue of donor shortage, living donor islet transplantation and bioartificial islet transplantation using pig islets are being evaluated. Bioartificial islet transplantation could be the ultimate solution of the donor shortage. Currently, overcoming immunological hurdles, establishing reliable islet isolation methods, and controlling porcine endogenous retrovirus are the primary obstacles to the implementation of this treatment. If bioartificial islet transplant becomes a clinical reality, it may even be applicable in the treatment of select Type 2 diabetic patients. β-Cell regeneration from naïve pancreas and β-cell generation from embryonic stem cells or induced pluripotent stem cells are the next-generation treatments for Type 1 diabetes.