The anterior chamber of the eye (ACE) has emerged as a promising clinical islet transplantation site because of its multiple advantages over the conventional intra-hepatic portal site. This includes reduced surgical invasiveness and increased islet graft survival rate. It also allows for enhanced accessibility and monitoring of the islets. Although the ACE is initially an immuno-privileged site, this privilege is disrupted once the islet grafts are re-vascularized. Given that the ACE is a confined space, achieving graft immune tolerance through local immunosuppressive drug delivery is therefore feasible. Here, we show that islet rejection in the ACE of mice can be significantly suppressed through local delivery of rapamycin by carefully designed sustained-release microparticles. In this 30-day study, allogeneic islet grafts with blank microparticles were completely rejected 18 days post-transplantation into mice. Importantly, allogeneic islet grafts co-injected with rapamycin releasing microparticles into a different eye of the same recipient were preserved much longer, with some grafts surviving for more than 30 days. Hence, islet allograft survival was enhanced by a localized and prolonged delivery of an immunosuppressive drug. We envisage that this procedure will relieve diabetic transplant recipients from harsh systemic immune suppression, while achieving improved glycemic control and reduced insulin dependence.