Islet transplantation refers to the transfusion of healthy islet cells into the diabetic recipients and reconstruction of their endogenous insulin secretion to achieve insulin independence. It is a minimally invasive surgery that holds renewed prospect as a therapeutic method for type 1 diabetes mellitus. However, poor oxygenation in the early post-transplantation period is considered as one of the major causes of islet loss and dysfunction. Due to the metabolism chacteristics, islets required a high supply of oxygen for cell survival while a hypoxia environment would lead to severe islet loss and graft failure. Emerging strategies have been proposed, including providing external oxygen and speeding up revascularization. From the perspective of formulation science, it is feasible and practical to protect transplanted islets by oxygen-release before revascularization as opposed to local hypoxia. In this study, we review the potential formulation strategies that could provide oxygen-release by either delivering external oxygen or triggering localized oxygen generation for transplanted islets.