Mesenchymal stem cells (MSCs) are known to have a protective effect on islet cells. Cell sheets developed using tissue engineering help maintain the function of the cells themselves. This study describes a tissue engineering approach using islets with MSC sheets to improve the therapeutic effect of islet transplantation. MSCs were obtained from Fischer 344 rats and engineered into cell sheets using temperature-responsive culture dishes. The islets obtained from Fischer 344 rats were seeded onto MSC sheets, and the islets with MSC sheets were harvested by low-temperature treatment after coculture. The functional activity of the islets with MSC sheets was confirmed by a histological examination, insulin secretion assay, and quantification of the levels of cytokines. The therapeutic effects of the islets with MSC sheets were investigated by transplanting the sheets at subcutaneous sites in severe combined immunodeficiency (SCID) mice with streptozotocin-induced diabetes. Improvement of islet function and viability was shown in situ on the MSC sheet, and the histological examination showed that the MSC sheet maintained adhesion factor on the surface. In the recipient mice, normoglycemia was maintained for at least 84 days after transplantation, and neovascularization was observed. These results demonstrated that islet transplantation in a subcutaneous site would be possible by using the MSC sheet as a scaffold for islets.