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Immunoprotection of islets using bioisolator systems permits introduction of allogeneic cells to diabetic patients without the need for immunosuppression. Using TheraCyte™ immunoisolation devices, we investigated two rat models of type 1 diabetes mellitus (T1DM), BB rats and rats made diabetic by streptozotocin (STZ) treatment. We chose to implant islets after the onset of diabetes to mimic the probable treatment of children with T1DM as they are usually diagnosed after disease onset. We encapsulated 1000 rat islets and implanted them subcutaneously (SQ) into diabetic biobreeding (BB) rats and STZ-induced diabetic rats, defined as two or more consecutive days of blood glucose >350 mg/dl. Rats were monitored for weight and blood glucose. Untreated BB rats rapidly lost weight and were euthanized at >20% weight loss that occurred between 4 and 10 days from implantation. For period of 30–40 days following islet implantation weights of treated rats remained steady or increased. Rapid weight loss occurred after surgical removal of devices that contained insulin positive islets. STZ-treated rats that received encapsulated islets showed steady weight gain for up to 130 days, whereas untreated control rats showed steady weight loss that achieved >20% at around 55 days. Although islet implants did not normalize blood glucose, treated rats were apparently healthy and groomed normally. Autologous or allogeneic islets were equally effective in providing treatment. TheraCyte™ devices can sustain islets, protect allogeneic cells from immune attack and provide treatment for diabetic-mediated weight loss in both BB rats and STZ-induced diabetic rats.