Early graft failure following intraportal islet transplantation (IPIT) represents a major obstacle for successful islet transplantation. Here, we examined the role of islet emboli in the induction of early graft failure and utilized a strategy of ischemic-preconditioning (IP) to prevent early islet destruction in a model of syngeneic IPIT in STZ-induced diabetic mice. Numerous focal areas of liver necrosis associated with the islet emboli were observed within 24 h post-IPIT. Pro-inflammatory cytokines, IL-1beta and IL-6, were significantly increased 3 h after IPIT, while TNF-alpha was elevated for up to 5 days post-IPIT. Caspase-3 and terminal deoxynucleotidyl transferase-mediated dUTP nick-end labeling positive cells were observed in the transplanted islets trapped in areas of necrotic liver at 3 h and 1 day post-IPIT. Hyperglycemia was corrected immediately following IPIT of 200 islets, but recurrence of hyperglycemia was observed within 14 days associated with a poor response to glucose challenge. IP, a procedure of pre-exposure of the liver to transient ischemia and reperfusion, protected the liver from embolism-induced ischemic injury and prevented early islet graft failure. These data suggest that islet embolism in the portal vein is a major cause of functional loss following IPIT that can be prevented by liver IP.