Summary The β-cell replacement by islet transplantation is an attractive approach for normalizing blood glucose without hypoglycaemia in patient with type 1 diabetes mellitus (T1D). A pioneer study by the Edmonton group more than a decade ago showed that alloislet transplantation may result in insulin independence for at least 1 year after transplantation. This breakthrough excited researchers, physicians and patients, who felt that the ultimate goal of cure for T1D was at hand. Longer follow-up of patients who underwent islet transplantation showed less favourable results, with only approximately 10% of the patients remaining insulin-free 5 years after transplantation. In the last few years, progress has been made, and the success rate of islet transplantation has steadily increased. Important hurdles, however, related to limited tissue supply and need for life-long immunosuppressive drugs have yet to be overcome. Herein, we review recent achievements in islet transplantation and the challenges that still need to be addressed before this procedure can become a standard therapy for T1D. Copyright © 2013 John Wiley & Sons, Ltd.