Microvascular development is determined by the interplay between tissue cells and microvascular endothelial cells. Because the pancreatic islet is an organ composed mainly of endothelial and endocrine cells, it represents a good model tissue for studying microvascular development in the context of a tissue. In this review, we will describe the special morphology of islet capillaries and its role in the physiologic function of islets: secretion of insulin in response to blood glucose levels. We will speculate on how islet-secreted VEGF-A generates a permeable endothelium that allows insulin to pass quickly into the blood stream. In addition, we speculate on how endothelial cells might form a capillary lumen within the islets. At the end, we look at the islet microvasculature from a medical point of view, thus describing its critical role during type I diabetes and islet transplantation. BioEssays 26:1069–1075, 2004. © 2004 Wiley Periodicals, Inc.