Pancreatic islet transplantation has been a treatment option for Type 1 diabetes since 1989. The most notable refinement since then has been the implementation of the “Edmonton protocol” in the year 2000 and recently, human islet allogeneic (allo-) transplantation has attained a historical milestone in the USA with the successful completion of the National Institute of Health (NIH)-funded multicenter clinical trial. With the development of human islet isolation technology, human autologous (auto-) islet transplantation has become a clinical option for prevention of surgical diabetes following total pancreatectomy in chronic pancreatitis patients. Meanwhile, islet xeno-transplantation is developing rapidly in particular characterization of immnunosuppression regimens, development of islet encapsulation technology and availability of genetically engineered pig donors. Despite tremendous progress in areas such as pancreas procurement and preservation, islet cell isolation, culture, preservation, new immunosuppression regimens, and new biological strategies, the clinical use of islet cell based treatment, especially allo- and xeno-transplantation, is limited due to post-transplantation challenges such as the failure of primary engraftment, immune destruction of the islet graft, lifelong need of immunosuppression, and an unmet need for large numbers of islets. To address these challenges a multidisciplinary approach, encompassing bioengineering and biologic techniques, are now being applied to islet transplantation. The authors have used a bioengineering approach that includes macroencapsulation, microencapsulation, and conformal coating (islet surface modification) to protect islet cells. The biologic approach which includes anti-inflammatory /anticoagulation was successfully applied to improve early engraftment, and insulin-producing cells were generated with stem cell technology. Finally, mesenchymal stem cells were used for induction of immune tolerance and creation of a novel transplantation site. In this review we examine the application of our multidisciplinary approach and how it has contributed to the success of islet transplantation.