Islet transplantation is a viable long-term therapeutic alternative to daily insulin replacement for type I diabetes. The allogeneic nature of the transplants poses immunological challenges for routine clinical utility. Gene transfer of immunoregulatory molecules and those that improve insulin release kinetics provides rational approaches to facilitate allogeneic islet transplantation as a potential therapy. We have examined the efficacy of a soluble type 1 tumor necrosis factor receptor (TNFR) immunoglobulin-Fc fusion transgene (TNFR-Ig) to protect human islets from cytokine-induced apoptosis in culture, as well as in facilitating allogeneic islet transplants in diabetic mice. Cultured human islets were transduced with an adenoviral vector encoding human TNFR-Ig (Ad-TNFR-Ig). TNFR-Ig protein was secreted by cultured islets, as well as by transduced mouse islet transplants recovered from mouse recipients. Glucose-induced insulin release kinetics were comparable among untransduced, Ad-TNFR-Ig-infected human islets and vector-transduced islets exposed to cytokines. In parallel, Ad-TNFR-Ig-infected islets were protected from cytokine-induced apoptosis activation. Finally, diabetic mice transplanted with allogeneic islets expressing TNFR-Ig returned to and maintained normoglycemia significantly longer than untransduced islet recipients. These data support the potential utility of TNFR-Ig gene transfer to islets as a means of facilitating allogeneic islet transplantation.