The liver is the current site for pancreatic islet transplantation, but has many drawbacks due to immunologic and nonimmunologic factors. We asked whether pancreatic islets could be engrafted in the bone marrow (BM), an easily accessible and widely distributed transplant site that may lack the limitations seen in the liver. Syngeneic islets engrafted efficiently in the BM of C57BL/6 mice rendered diabetic by streptozocin treatment. For more than 1 year after transplantation, these animals showed parameters of glucose metabolism that were similar to those of nondiabetic mice. Islets in BM had a higher probability to reach euglycemia than islets in liver (2.4-fold increase, P = .02), showed a compact morphology with a conserved ratio between alpha and beta cells, and affected bone structure only very marginally. Islets in BM did not compromise hematopoietic activity, even when it was strongly induced in response to a BM aplasia-inducing infection with lymphocytic choriomeningitis virus. In conclusion, BM is an attractive and safe alternative site for pancreatic islet transplantation. The results of our study open a research line with potentially significant clinical impact, not only for the treatment of diabetes, but also for other diseases amenable to treatment with cellular transplantation.