Inclusion Criteria:

• Male and Female patients age 18 to 65 years of age
• Clinical history compatible with type 1 diabetes with onset of disease at <40 years of age and insulin-dependence for >5 years at the time of enrollment.
• Body mass index less than or equal to 26
• 18 to 65 years of age
• Absent stimulated C-peptide (<0.3ng/ml) in response to a mixed meal tolerance test (Boost® 6 mL/kg body weight to a maximum of 360 mL; another product with equivalent caloric and nutrient content may be substituted for Boost) measured at 90min after the end of consumption.
• Compliance with an optimized diabetic management plan as assessed by an Emory University endocrinologist
• Checking and recording blood sugars at least 3 times per day
• Involvement in intensive diabetes management defined as self monitoring of glucose values no less than a mean of three times each day averaged over each week and by the administration of three or more insulin injections each day or insulin pump therapy. Such management must be under the direction of an endocrinologist, diabetologist, or diabetes specialist with at least 3 clinical evaluations during the previous 12 months.
• At least one episode of severe hypoglycemia in the past 3 years defined as an event with symptoms compatible with hypoglycemia in which the subject required the assistance of another person and which was associated with either a blood glucose level <50 mg/dL [2.8 mmol/L] or prompt recovery after oral carbohydrate, intravenous glucose, or glucagon administration).
• Reduced awareness of hypoglycemia as defined by a Clarke score of 4 or more and a HYPO score greater than or equal to the 90th percentile (1047) within the last 6 months prior to randomization; OR Marked glycemic lability characterized by wide swings in blood glucose despite optimal diabetes therapy and defined by a glycemic lability index (LI) score greater than or equal to the 90th percentile (433 mM2/h/wk) within the last 6 months prior to randomization; OR A composite of a Clarke score of 4 or more and a HYPO score greater than or equal to the 75th percentile (423) and a LI greater than of equal to the 75th percentile (329) within the last 6 months prior to randomization.

Exclusion Criteria:

• Severe co-existing cardiac disease, characterized by any one of these conditions:
• Recent myocardial infarction (within past six months)
• Left Ventricular Ejection Fraction < 30%
• Evidence of ischemia on a functional echocardiogram
• Active infection including hepatitis B, hepatitis C, HIV, or TB as determined by a positive skin test or clinical presentation, or under treatment for suspected TB. Positive tests are acceptable only if associated with a history of previous vaccination in the absence of any sign of active infection. Positive tests are otherwise not acceptable, even in the absence of any active infection at the time of evaluation
• Invasive aspergillus infection within one year prior to study entry.
• Negative screen for Epstein-Barr Virus (EBV) by IgG determination.
• Administration of live vaccine within the past two months
• Measured glomerular filtration rate using iohexol <70 mL/min/1.73 m2 for females and <80 mL/min/1.73 m2 for males (or a 24 hr. creatinine clearance with participants allergic to iodine <85mL/min/1.73m2).
• Macroalbuminuria (urinary protein excretion rate >300 mg/24h)
• Baseline Hgb below the lower limits of normal at the local laboratory; lymphopenia (<1,000/L), neutropenia (<1,500/L), or thrombocytopenia (platelets <100,000/ L).
• Hyperlipidemia (fasting LDL cholesterol >130 mg/dL, treated or untreated; and/or fasting triglycerides >300 mg/dL)
• Negative antibody test for Varicella zoster virus (subjects may be reconsidered if they receive the vaccination and convert to a positive antibody)
• History of malignancy (except squamous or basal cell skin carcinoma) within the previous 5 years
• Previous/concurrent organ transplantation
• Presence of HLA Panel Reactive Antibodies >20%
• Active peptic ulcer disease
• Evidence of gallbladder disease including cholecystitis and cholelithiasis
• Evidence of liver disease including: hepatic neoplasm, portal hypertension, or persistently abnormal liver function tests
• Current use of systemic steroid medications
• Evidence of insulin resistance (insulin requirements >0.8 units/kg/day)
• Inability to provide informed consent
• Severe unremitting diarrhea, vomiting or other gastrointestinal disorders potentially interfering with the ability to absorb oral medications.
• Hyperlipidemia despite medical therapy (fasting LDL cholesterol >130 mg/dL, treated or untreated; and/or fasting triglycerides >200 mg/dL).
• Acute or chronic pancreatitis.
• Symptomatic peptic ulcer disease.
• Use of any other investigational agents within 4 weeks of participation.
• Any condition or any circumstance that makes it unsafe to undergo an islet cell transplant
• Any coagulopathy or medical condition requiring long-term anticoagulant therapy (e.g., warfarin) after transplantation (low-dose aspirin treatment is allowed) or patients with an INR >1.5.
• Sickle Cell Anemia (Subjects with Sickle Cell Anemia, trait HbSS, are at high risk for complications after transplantation related to immunosuppressive therapy. These complications include stroke and sickle cell crisis. Therefore, we will exclude these subjects from our study to minimize risks to study subjects.)
• For female participants: Positive pregnancy test, presently breast-feeding, or unwillingness to use effective contraceptive measures for the duration of the study and 3 months after discontinuation. For male participants: intent to procreate during the duration of the study or within 3 months after discontinuation or unwillingness to use effective measures of contraception. Oral contraceptives, Norplant®, Depo-Provera®, and barrier devices with spermicide are acceptable contraceptive methods; condoms used alone are not acceptable.
• Active alcohol or substance abuse. This includes cigarette smoking (must be abstinent for six months).

Active alcohol abuse should be considered using the current NIAAA definitions, whereby alcohol abuse is defined by a pattern of drinking that is accompanied by one or more of the following situations within a 12-month period:

• Failure to fulfill major work, school, or home responsibilities
• Drinking in situations that are physically dangerous, such as while driving a car or operating machinery
• Recurring alcohol-related legal problems, such as driving under the influence of alcohol or for causing physical harm to someone while intoxicated
• Continued alcohol abuse despite having ongoing relationship problems that are caused or worsened by the effects of alcohol
• Psychiatric disorder making the subject not a suitable candidate for transplantation, e.g., schizophrenia, bipolar disorder, or major depression that is unstable or uncontrolled on current medication. (A psychological or psychiatric consultation is required only if considered necessary by some current indication or history.)