The pancreatic islet is highly vascularised, with an extensive capillary network. In addition to providing nutrients and oxygen to islet endocrine cells and transporting hormones to the peripheral circulation, islet capillaries (comprised primarily of islet endothelial cells) are an important source of signals that enhance survival and function of the islet beta cell. In type 2 diabetes, and animal models thereof, evidence exists of morphological and functional abnormalities in these islet endothelial cells. In diabetes, islet capillaries are thickened, dilated and fragmented, and islet endothelial cells express markers of inflammation and activation. In vitro data suggest that this dysfunctional islet endothelial phenotype may contribute to impaired insulin release from the beta cell. This review examines potential candidate molecules that may mediate the positive effects of islet endothelial cells on beta cell survival and function under normal conditions. Further, it explores possible mechanisms underlying the development of islet endothelial dysfunction in diabetes and reviews therapeutic options for ameliorating this aspect of the islet lesion in type 2 diabetes. Finally, considerations regarding differences between human and rodent islet vasculature and the potentially unforeseen negative consequences of strategies to expand the islet vasculature, particularly under diabetic conditions, are discussed.