Although islet transplantation may restore insulin independence to individuals with type 1 diabetes mellitus, most have abnormal glucose tolerance. We asked whether the defective glucose tolerance is due to inadequate β-cell mass or to impaired insulin sensitivity. We performed metabolic studies on four cynomolgus primates before inducing diabetes with streptozotocin (STZ), then again 2-3 weeks after restoring insulin independence via intrahepatic islet transplantation utilizing a calcineurin inhibitor-free immunosuppressive regimen (induction with rabbit antithymocyte globulin and maintenance therapy with rapamycin). Engrafted β-cell mass was assessed by acute insulin and C-peptide responses to glucose (AIR(glu) and ACR(glu)) and arginine (AIR(arg) and ACR(arg)). Insulin sensitivity (S(I)) was determined in naive and transplanted primates from an intravenous glucose tolerance test using the minimal model. α-Cell function was determined by the acute glucagon response to arginine (AGR(arg)). Glucose tolerance (K(g)) decreased from 4.1 ± 0.5%/min in naive primates to 1.8 ± 0.3%/min in transplanted primates (p < 0.01). Following transplantation, AIR(glu) was 28.7 ± 13.1 μU/ml compared to 169.9 ± 43.1 μU/ml (p < 0.03) in the naive condition, ACR(glu) was 14.5 ± 6.0 ng/ml compared to 96.5 ± 17.0 ng/ml naive (p < 0.01), AIR(arg) was 29.1 ± 13.1 μU/ml compared to 91.4 ± 28.2 μU/ml naive (p < 0.05), and ACR(arg) was 1.11 ± 0.51 ng/ml compared to 2.79 ± 0.77 ng/ml naive (p < 0.05). S(I) did not differ from naive to posttransplant states. AGR(arg) was reduced in transplanted primates (349 ± 118 pg/ml) when compared to both naive (827 ± 354 pg/ml) and post-STZ diabetic primates (1020 ± 440 pg/ml) (p < 0.01 for both comparisons). These data suggest that impaired glucose tolerance observed in islet transplant recipients is secondary to low functional β-cell mass and not to insulin resistance shortly after transplant. Furthermore, improved glycemic control achieved via islet transplantation over the diabetic state might be attained, in part, via reduced glucagon secretion.