Insulin-dependent diabetes mellitus (IDDM) or type 1 diabetes is an autoimmune disease that results in destruction of the insulin-producing pancreatic islet beta cells. Several factors induce the invasion of immune cells into islets and trigger inflammation. Gene therapy approaches targeting the islet cells could be an effective treatment to prevent the onset or reverse type 1 diabetes. Allogeneic islet transplantation provides short-term treatment. However, genetically modified islets, which resist the host immune response, could provide long-term solutions. Adeno-associated virus (AAV) is emerging as a prominent vector system for delivering therapeutic genes for human gene therapy. AAV vector can transduce nondividing cells and provide long-term gene expression by integrating into host chromosome. Therefore, it is an appropriate vector system for islet cell gene therapy. To test the efficacy of AAV vector to transduce pancreatic endocrine cells, we constructed AAV vectors using plasmid pSub201. Wild-type AAV DNA analogue from plasmid psub201 was subcloned into a cloning plasmid pSP72 and AAV vectors were constructed by inserting the transgenes with heterologous promoter in place of AAV open reading frames (rep and cap). In this report we demonstrate the transduction of pancreatic islet cells with AAV vectors encoding bacterial β-galactosidase enzyme or enhanced green fluorescent protein (EGFP) as reporter gene. Dispersed porcine and rat islet cells can be transduced by AAV vector, with an efficiency of 47% and 38%, respectively. In particular porcine islet insulin producing beta cells were transduced with an efficiency of 39%. Intact rat islet cells were transduced with an efficiency of 26% as estimated by FACS analysis following transduction with an AAV vector encoding EGFP. Transduction of intact rat islets with an AAV vector did not alter glucose-induced insulin secretion. AAV vector transduction was higher in transformed islet cell lines INS-1 and RIN m5F with an efficiency of 65% and 57%, respectively. These new results suggest that AAV vectors will provide an improved method of gene delivery to pancreatic islets and isolated pancreatic beta cells.