Within the pancreatic islet, the intra-islet vasculature plays a crucial role in pancreatic development, islet function and beta cell survival. We have shown that vascular endothelial cells are rapidly lost from isolated pancreatic islets during culture. Endothelial progenitor cells (EPCs) represent a potential cellular therapy that may replenish diminished intra-islet endothelial cell populations and improve the engraftment of transplanted pancreatic islets. In addition, EPCs may directly affect the function of pancreatic beta cells. In a diabetic murine syngeneic marginal mass islet transplant model we found that co-transplanted EPCs markedly improved the cure rate and initial glycaemic control of transplanted islets. Gene expression data indicate that EPCs, or their soluble products, modulate the expression of the beta cell surface molecule connexin 36, and affect glucose-stimulated insulin release. Using transwell co-cultures of MIN6 and MS-1 cell lines we have further examined the molecules and pathways involved in the crosstalk between beta cells and endothelial cells, and highlight connexin 36 as an important beta cell gap junction protein that is potentially modulated by endothelial factors. This finding will have relevance for pancreatic islet function post-transplantation, as well as during the development of Type 1 and Type 2 diabetes.