Clinical islet transplantation for type 1 diabetes mellitus currently requires potent immunosuppressive drugs, which limits the procedure to the most severe forms of the disease, and many of the drugs are directly beta-cell toxic. A class of compounds called sphingosine-1-phosphate receptor modulators has been explored in transplantation and shown to be highly effective in multiple sclerosis and other autoimmune conditions. While FTY720, the first drug in this class, may not move forward initially in transplantation, this class requires detailed investigation to assess direct impact upon human beta-cell function and survival. We set out to evaluate the effects of FTY720 on human islets in vitro by investigating glucose-stimulated insulin and apoptosis; and in vivo, after transplantation into immunodeficient mice with chemically induced diabetes, by examining blood glucose levels, oral glucose tolerance tests and stimulated human C-peptide over a 50-day follow-up period. Our data showed that neither in vitro, nor in vivo human islet function was impaired by FTY720 exposure. Since FTY720 demonstrated no detrimental effects on human islet function in vitro or in vivo, emerging S1PR modulators may prove to be useful adjuncts in clinical islet transplantation through lack of diabetogenicity and potent immunological protection.