OBJECTIVE Islet transplantation is used therapeutically in a minority of patients with type 1 diabetes. Successful outcomes are hampered by early islet beta cell loss. The adjuvant co-transplantation of mesenchymal stromal cells (MSCs) has the promise to improve islet transplant outcome. METHODS We used a syngeneic marginal islet mass transplantation model in a mouse model of diabetes. Mice received islets or islets plus 250,000 MSCs. Kidney subcapsule, intra-hepatic and intra-ocular islet transplantation sites were used. Apoptosis, vascularisation, beta cell proliferation, MSC differentiation and laminin levels were determined by immunohistochemical analysis and image quantification post-transplant. RESULTS Glucose homeostasis after the transplantation of syngeneic islets was improved by the co-transplantation of MSCs together with islets under the kidney capsule (p = 0.01) and by intravenous infusion of MSCs after intra-hepatic islet transplantation (p = 0.05). MSC co-transplantation resulted in reduced islet apoptosis, with reduced numbers of islet cells positive for cleaved caspase 3 being observed 14 days post-transplant. In kidney subcapsule, but not in intra-ocular islet transplant models, we observed increased re-vascularisation rates, but not increased blood vessel density in and around islets co-transplanted with MSCs compared with islets that were transplanted alone. Co-transplantation of MSCs did not increase beta cell proliferation, extracellular matrix protein laminin production or alpha cell numbers, and there was negligible MSC transdifferentiation into beta cells. CONCLUSIONS Co-transplantation of MSCs may lead to improved islet function and survival in the early post-transplantation period in humans receiving islet transplantation.