Islet transplantation in mice serves as a crucial preclinical model for understanding alloimmune and autoimmune mechanisms, optimizing immunosuppressive strategies, and developing novel therapies for diabetes. This review provides a comprehensive overview of best practices in murine islet transplantation, including diabetes induction models, technical aspects of islet transplantation, and criteria for transplant graft and rejection. We discuss the immunological challenges posed by MHC disparities, the impact of various transplantation sites, and the limitations of murine models in translating findings to clinical settings. Special emphasis is placed on emerging strategies such as stem cell-derived insulin-producing cells, immune tolerance induction, and alternative transplantation sites. While mouse models have significantly advanced our understanding of diabetes and β-cell replacement, their inherent differences from human physiology necessitate careful interpretation of findings. The review also highlights novel imaging modalities, immunosuppressive protocols, and biomarkers for graft monitoring, underscoring the need for further refinement of these models to bridge the gap between experimental research and clinical application. By standardizing methodologies and addressing translational limitations, murine islet transplantation studies remains a key model in transplantation and can continue to shape the future of β-cell replacement therapies for insulin dependent diabetes.