Islet transplantation, with the advent of the Edmonton protocol in 2000, has offered a significant alternative for long-lasting treatment of type 1 diabetes. However, the immunosuppression required for transplantation has the cytotoxic effect on pancreatic islets, and thus limiting the long-term efficacy of the transplant. Immediate loss of islets after transplant was also observed because of immediate blood-mediated inflammatory response (IBMIR), which kills islets transplanted in the liver through portal vein. There is also commonly a lack of microvascular blood supply to the transplanted islets. In this chapter, we will review the variety of technologies used to protect transplanted islets against toxicity of immunosuppression, immune rejection, and inflammatory response. We will evaluate the mechanisms of these technologies and their progress in solving the challenges to islet transplantation. The technologies include encapsulation of transplanted islets in various polymers, transplants in sites other than the liver, and creation of new prevascularized transplant site. These technologies offer several mechanisms to prevent immune rejection or immediate contact with cytotoxic inflammatory response, in addition to maintaining islet integrity. New transplant sites are also being developed to support the islets, by allowing establishment of microvasculature and innervation, prior to addition of the islets.