Alloxan diabetes was induced in inbred rats that then were divided into four groups consisting of unoperated diabetic controls, sham-operated diabetic controls, rats given pancreaticoduodenal isografts, and rats given duct-ligated pancreas isografts. The animals were studied for from 18 months (controls) to two years (transplants) and the following important results were obtained: 1) In striking contrast to the diabetic controls, pancreas transplants of both types produced immediate and permanent relief of hyperglycemia, immediate and lasting elevation of serum insulin levels, a normal weight and growth curve, and good health for two years. Removal of the graft was followed by recurrence of severe diabetes. 2) Pancreas transplants of both types prevented the widespread and severe renal, ophthalmic and neural lesions of diabetes that were found in the diabetic controls. 3) The duct-ligated pancreas graft and pancreaticoduodenal transplant were equally effective in controlling diabetes. Ligation of the pancreatic duct was not followed by significant morphologic or clinical evidence of pancreatitis or by loss of endocrine function. 4) Portal venous drainage of the pancreas transplant was unnecessary for good endocrine function.