Human islet allografts restore euglycemia and insulin independence in immunosuppressed type 1 diabetic recipients with hypoglycemia unawareness. For islet transplants to become a treatment option for patients with microvascular complications, the efficacy of islet transplants to reverse diabetes must be improved, the risks of immunosuppressive therapy must be minimized, andregression of microvascular lesions in islet recipients must be demonstrated. To address these challenges, an interdisciplinary group of investigators proposes to study - in a prospective, randomized clinical trial - the following Specific Aims: #1: To determine the efficacy and safety of peritransplant deoxyspergualin versus placebo for the enhancement of engraftment of islet allografts in type 1 diabetes. #2: To determine the immunosuppressive efficacy of a steroid-free and calcineurin inhibitor-sparing regimen in type 1 diabetic islet allograft recipients. #3: To determine the effects of islet transplants versus intensive insulin therapy on early microvascular lesions in type 1 diabetic subjects. Accompanying mechanistic studies will 1) determine the predictive value of real-time islet potency assays and islet cytokine and chemokine profiles on posttransplant islet function, 2) examine glycemic control, insulin secretion, insulin pulsatility, and insulin sensitivity in islet transplant recipients, and 3) analyze the predictive value of immune monitoring assays for the detection of islet rejection and recurrent autoimmunity. The results of the proposed studies will improve our understanding of safety and efficacy of antiinflammatory therapy, and steroid-free and calcineurin inhibitor-sparing immunosuppressive regimens in type 1 diabetic islet allograft recipients. This study will also provide a rational basis for treatment recommendations for type 1 diabetic patients with early microvascular lesions.