Diabetes mellitus is increasing worldwide. Type 1 diabetes can be treated successfully by islet allotransplantation, the results of which are steadily improving. However, the number of islets that can be obtained from deceased human donors will never be sufficient to cure more than a very small percentage of patients who might benefit from transplantation. Although there are some differences in glucose metabolism between pigs and humans, the use of pigs could provide an unlimited supply of islets, and the insulin produced would undoubtedly control glucose levels. Transplantation of islets into the portal vein results in islets residing in the liver; however, an early inflammatory response and rejection remain problematic, even when the recipient is receiving immunosuppressive therapy. In the long term, immunosuppressive drugs may exhibit toxicities to patients and specifically harm the islet cells. In contrast, encapsulation techniques provide islets with a physical barrier that prevents antibodies binding to the islet graft while still allowing insulin to be released into the recipient’s circulation; in theory, patients receiving encapsulated grafts might not require exogenous immunosuppressive therapy. Nonhuman primates with encapsulated pig islet transplants have remained insulin-independent for several weeks, but long-term efficacy remains uncertain. Furthermore, techniques are now available to knock out genes from the pig and/or insert human genes, thus rendering the antigenic structure of pigs closer to that of humans, and providing protection from the human immune response. Islet transplantation from genetically engineered pigs has been followed by insulin independence in a small number of nonhuman primates for greater than 1 year. Neonatal islets have some advantages over adult islets in that they are easier to isolate and culture, and have the ability to proliferate during the first few months after transplantation. In 2009, the International Xenotransplantation Association set up a group to encourage and advise on clinical trials of pig islet xenotransplantation; this group’s guidelines are discussed. Clinical trials of encapsulated pig islets are already under way.