The transcription factor Pax4 plays an essential role in the development of insulin-producing β cells in pancreatic islets. Ectopic Pax4 expression not only promotes β cell survival but also induces α-to-β cell transdifferentiation. This dual functionality of Pax4 makes it an appealing therapeutic target for the treatment of insulin-deficient type 1 diabetes (T1D). In this study, we demonstrated that Pax4 gene delivery by an adenoviral vector, Ad5.Pax4, improved β cell function of mouse and human islets by promoting islet cell survival and α-to-β cell transdifferentiation, as assessed by multiple viability assays and lineage-tracing analysis. We then explored the therapeutic benefits of Pax4 gene delivery in the context of islet transplantation using T1D mouse models. Both mouse-to-mouse and human-to-mouse islet transplantation, via either kidney capsule or portal vein, were examined. In all settings, Ad5.Pax4-treated donor islets (mouse or human) showed substantially better therapeutic outcomes. These results suggest that Pax4 gene delivery into donor islets may be considered as an adjunct therapy for islet transplantation, which can either improve the therapeutic outcome of islet transplantation using the same amount of donor islets or allow the use of fewer donor islets to achieve normoglycemia.