Degeneration and loss of retinal capillary pericytes are characteristic features of diabetic retinopathy. The effect of pancreatic islet cell allotransplantation across a major histocompatibility barrier on diabetic pericyte changes was examined in streptozotocin induced diabetic rats 14 months post-transplantation. Morphological studies of the retinal microvasculature were carried out using qualitative and quantitative morphological techniques.We describe significant prevention of pericyte degeneration and loss after successful allotransplantation suggesting that pancreatic islet allograft is a promising therapeutical approach in the prevention of diabetic retinopathy.