Type 1 diabetes is an autoimmune disease characterized by insulin-producing β cell destruction. Although islet transplantation restores euglycemia and improves patient outcomes, an ideal transplant site remains elusive. Brown adipose tissue (BAT) has a highly vascularized and antiinflammatory microenvironment. Because these tissue features can promote islet graft survival, we hypothesized that islets transplanted into BAT will maintain islet graft and BAT function while delaying immune-mediated rejection. We transplanted syngeneic and allogeneic islets into BAT or under the kidney capsule of streptozotocin-induced diabetic NOD.Rag and NOD mice to investigate islet graft function, BAT function, metabolism, and immune-mediated rejection. Islet grafts within BAT restored euglycemia similarly to kidney capsule controls. Islets transplanted in BAT maintained expression of islet hormones and transcription factors and were vascularized. Compared with those in kidney capsule and euglycemic mock-surgery controls, no differences in glucose or insulin tolerance, thermogenic regulation, or energy expenditure were observed with islet grafts in BAT. Immune profiling of BAT revealed enriched antiinflammatory macrophages and T cells. Compared with the kidney capsule control, there were significant delays in autoimmune and allograft rejection of islets transplanted in BAT, possibly due to increased antiinflammatory immune populations. Our data support BAT as an alternative islet transplant site that may improve graft survival.