Clinical transplantation of human islets has a disappointingly low rate of success. We report here the identification of a possible causative factor: endotoxin present in the collagenase preparations used to disperse the pancreatic tissue before islet purification and transplantation. Supporting evidence includes (1) detection of unexpectedly high levels of endotoxin in most collagenase solutions currently used to digest human pancreases; (2) demonstration that supernatants generated during islet separation are able to induce the inflammatory cytokines interleukin (IL)-1, IL-6, and tumor necrosis factor-α (TNF-α) in macrophages; and (3) induction of IL-1, IL-6, and TNF-α in the islets during the separation procedure. Cytokine expression was assessed by reverse transcription-polymerase chain reaction and, for TNF-α, confirmed by enzyme-linked immunoabsorbent assay. It is proposed that endotoxin and locally induced cytokines carried over with the graft activate the endothelium and promote lymphomonocytic infiltration of grafted islets and surrounding liver tissue favoring primary nonfunction and early rejection. These results also have implications for the numerous experimental procedures that use collagenase, and they point to possible ways to improve islet preparation and transplantation protocols.