Chronic diabetes-related complications continue to exert a rapidly growing and unsustainable pressure on healthcare systems worldwide. In type 1 diabetes, glycemic control is particularly challenging, as intensive management substantially increase the risk of severe hypoglycemic episodes. Alternative approaches to address this issue are required. Islet cell transplantation offers the best approach to reduce hypoglycemic risks and glycemic lability, while providing optimal glycemic control. Although ongoing efforts have improved clinical outcomes, the constraints in tissue sources and the need for chronic immunosuppression limit the application of islet cell transplantation as a curative therapy for diabetes. This review provides an update on islet cell transplantation, focusing on recent clinical experience, ongoing research, and future challenges. Current evidence demonstrates advances in terms of long-term glycemic control, improved insulin independence rates, and novel approaches to eliminate chronic immunosuppression requirements after islet cell transplantation. Advances in stem cell-based therapies provide a promising path towards truly personalized regenerative therapies, solving both tissue supply shortage and the need for lifelong immunosuppression, enabling widespread use of this potentially curative treatment. However, as these therapies enter the clinical realm, regional access variability and ethical questions regarding commercialization are becoming increasingly important and require a collaborative solution. In this state-of-the-art review, we discuss current clinical evidence and discuss key aspects on the present and future of islet cell transplantation.