The study is a phase 2, monocentric, open-label study. The investigators will recruit 12 patients with T1D to be randomly (1:1) assigned to receive islet either into the liver through the portal venous circulation (standard procedure; arm A, n=6) or directly into the omentum (arm B, n=6). Patients will be selected from those eligible for islet Tx based on local practice and guidelines. Immunosuppression will consist of five doses IV infusion of rabbit Anti-thymocyte Globulin (ATG, Thymoglobulin®), starting two days prior to the islet transplant. Maintenance mycophenolate mofetil (MMF) therapy (1-2 g/day as BID dosing) will be started on Day -1 pre-transplant. Tacrolimus will be administered orally twice daily on Day 1 post-transplant to maintain a trough level of 10-12 ng/mL for 3 months, then 6-10 ng/mL thereafter. Etanercept will be given IV before the islet transplant (50 mg), and then at 25 mg (subcutaneously) on POD +3, +7 and +10.

Inclusion Criteria:

• Ability to provide written informed consent.
• Mentally stable and able to comply with the procedures of the study protocol.
• Clinical history compatible with T1D with onset of disease at <40 years of age, insulin-dependence for > 5 years at the time of enrollment, and a sum of subject age and insulin-dependent diabetes duration of ≥28.
• Absent stimulated c-peptide (<0.3ng/mL) in response to a MMTT
• Involvement in intensive diabetes management
• At least one episode of severe hypoglycemia in the 12 months prior to study enrollment.
• Reduced awareness of hypoglycemia as defined by a Clarke score of 4 or more OR a HYPO score greater than or equal to the 90th percentile (1047) during the screening period; OR marked glycemic lability characterized by wide swings in BG despite optimal diabetes therapy and defined by an LI score greater than or equal to the 90th percentile (43 mmol/L2/h·wk-1) during the screening period; OR a composite of a Clarke score of 3 or less and a HYPO score greater than or equal to the 75th percentile (423) and a LI greater than or equal to the 75th percentile (329) during the screening period.

Exclusion Criteria:

• Body Mass Index (BMI) >30 kg/m2 or patient weight ≤50 kg.
• Insulin requirement of >1.0 IU/kg/day or <15 U/day.
• HbA1c >10%.
• Untreated proliferative diabetic retinopathy.
• Blood Pressure: SBP >160 mmHg or DBP >100 mmHg.
• Measured glomerular filtration rate <80 mL/min/1.73 m2.
• Presence or history of macroalbuminuria (>300mg/g creatinine).
• Presence or history of panel-reactive anti-HLA antibodies above background by flow cytometry.
• For female subjects: Serum or urine Positive pregnancy test, presently breast-feeding, or unwillingness to use effective contraceptive measures for the duration of the study and 4 months after discontinuation.
• For male subjects: intent to procreate during the duration of the study or within 4 months after discontinuation or unwillingness to use effective measures of contraception.
• Presence or history of active infection including hepatitis B, hepatitis C, HIV, or tuberculosis (TB). Subjects with laboratory evidence of active infection are excluded even in the absence of clinical evidence of active infection.
• Negative screen for Epstein-Barr Virus (EBV) by IgG determination.
• Invasive aspergillus, histoplasmosis, and coccidioidomycosis infection within one year prior to study enrollment.
• Any history of malignancy except for completely resected squamous or basal cell carcinoma of the skin.
• Baseline Hb below the lower limits of normal at the local laboratory; lymphopenia (<1,000/µL), neutropenia (<1,500/µL), or thrombocytopenia (platelets <100,000/µL)
• A history of Factor V deficiency.
• Any coagulopathy or medical condition requiring long-term anticoagulant therapy (e.g., warfarin) after transplantation (low-dose aspirin treatment is allowed) or patients with an international normalized ratio (INR) >1.5.
• Severe co-existing cardiac disease
• Persistent elevation of liver function tests at the time of study entry.
• Symptomatic cholecystolithiasis.
• Acute or chronic pancreatitis.
• Symptomatic peptic ulcer disease.
• Hyperlipidemia despite medical therapy
• Receiving treatment for a medical condition requiring chronic use of systemic steroids, except for the use of ≤5 mg prednisone daily, or an equivalent dose of hydrocortisone, for physiological replacement only.
• Treatment with any anti-diabetic medications other than insulin within 4 weeks of enrollment.
• Use of any investigational agents within 4 weeks of enrollment. 24. Administration of live attenuated vaccine(s) within 2 months of enrollment.
• Inflammatory bowel disease.
• History of intestinal obstructions.
• Previous major abdominal surgery.
• History of peritonitis