Beta-cell replacement therapies, including islet and pancreas transplantation, offer promising results in term of glycemic control for patients with type 1 diabetes experiencing high glycemic variability and severe hypoglycemia. However, long-term insulin independence remains challenging due to progressive graft function decline. Immunosuppressive regimens, especially calcineurin inhibitors such as tacrolimus, are known to be diabetogenic, contributing to the paradox of impaired beta-cell function in a diabetes treatment setting. Recent studies have focused on CTLA4-Ig (e.g., belatacept) as a potential alternative to calcineurin inhibitors, showing promising results in preclinical and clinical models. This review summarizes key advancements and remaining challenges in CTLA4 applications for beta-cell replacement. First, genetic engineering approaches aiming for CTLA4 expression in islets demonstrated initial success in delaying rejection but remain hindered by immune escape and limited integration efficacy. Coating techniques and exogenous CTLA4-Ig administration offer simpler, albeit transient, immunosuppressive effects, which, combined with encapsulation technologies, can improve graft survival. In non-human primate models, islet transplantation with immunosuppressant regimen using CTLA4-Ig combined with agents such as sirolimus or anti-CD154 has shown extended insulin independence, though full immune tolerance remains elusive. A limited number of human studies using belatacept for beta-cell replacement indicate reduced HbA1c levels and avoidance of severe hypoglycemia, yet consistent absence of rejection remains unachieved. Future research on BCR with CTLA4-Ig should explore graft survival in human islets transplantation and refine immunosuppressive protocols to leverage CTLA4-Ig potential in improving long-term graft function, thus enhancing the sustainability of CTLA4-Ig in clinical beta-cell replacement approach.