Pancreatic islet transplant is suggested as a promising treatment option in diabetes, but the number of viable and functional islets and the long-term efficacy of transplanted islets have not been satisfactory. Islet isolation leads to destruction of the extracellular matrix and loss of trophic support of islets, which reduces their survival and function. Reconstruction of islet microenvironment with biomaterials may preserve islet survival and graft efficacy. Accordingly, we investigated the effects of pancreatic islet homogenate on islet quality and graft outcomes in diabetic rats. Islets were isolated from the pancreas of Sprague Dawley rats and were cultured with or without pancreatic islet homogenate. Before transplant, viability, insulin content, and insulin released from cultured islets were assessed. Islets were then transplanted into subcapsular space of diabetic rat kidney. Transplant outcomes were evaluated by plasma glucose and insulin levels, glucose tolerance tests, and stress oxidative markers. Viability and insulin release in the pancreatic islet homogenate-treated islets were significantly higher than that in the control islets. After transplant of islets, recipient rats with pancreatic islet homogenate showed significant decreases in blood glucose and malondialdehyde levels and increases in superoxide dismutase activity and plasma insulin levels. Islet treatment with pancreatic islet homogenate could improve islet survival and transplant function and outcomes. Oxidative stress reduction might be a secondary beneficial effect of improved quality of treated islets.