Diabetes Mellitus (DM) is a severe metabolic disease, in which the body cannot maintain glucose level in the blood, resulting in hyperglycemia. Type I DM is an autoimmune disease caused by the destruction of β-cells, which are insulin secreting endocrine cells in pancreas. For Type I DM treatment, islet transplantation is becoming a promising treatment for Type I DM with minimally invasive surgery. Since 2000, the Edmonton protocol and the modified procedures using steroid-free immunosuppression were proposed. The surgery carries less mortality and morbidity. However, currently, islet transplantation faces several limitations such as donor shortage, islet loss, poor islet quality control, and the usage of immunosuppressant. To overcome these obstacles, novel solutions, such as alternative β-cells sources, effective pancreas preservation, improved isolation procedure, standard islet functional assessments, new immunosuppression regimes are needed. This thesis proposes to address these limitations by applying an emerging technology, microfluidics. Microfluidic technology can provide a unique platform to understand pancreatic islet physiology and has been developed as perifusion apparatus for studying insulin secretion kinetics in conjunction with optical imaging of stimulus- secretion coupling factors, such as calcium influx and mitochondrial potential changes. New generation of microfluidic perifusion systems (dual-perifusion device design) has been established with the improvement of flow dynamic control, mixing efficiency, assay throughput. This dual-perifusion microfluidic device allows users to have superior control over the desired islet microenvironment and culture conditions without compromising the spatiotemporal resolution of the measured parameters. Therefore, microfluidic- based assay can be an attractive tool for real-time assessment of β-cell function based on β-cell physiology and can be used as a gold standard for assessing the functionality of islet preparations post isolation prior to transplantation. Furthermore, systematic bubble prevention system for long-term culture of pancreatic islets in a microfluidic device has been developed with portable bubble traps. Successful long-term culture in microfluidic device is necessary to expand microfluidics applicability in terms of pancreatic islet research. Based on long-term culture set-up, we have investigated the effects of various immunosuppressive drugs on pancreatic islets through invention of new multi- perifusion microfluidic device.