Calcineurin inhibitors such as cyclosporine A and FK506 have been used for transplant therapy and treatment of autoimmune diseases. However, the inhibition of calcineurin outside the immune system has a number of side effects, including hyperglycemia. In the search for safer drugs, we developed a cell-permeable inhibitor of NFAT (nuclear factor of activated T cells) using the polyarginine peptide delivery system^,. This peptide provided immunosuppression for fully mismatched islet allografts in mice. In addition, it did not affect insulin secretion, whereas FK506 caused a dose-dependent decrease in insulin secretion. Cell-permeable peptides can thus provide a new strategy for drug development and may eventually be useful clinically.