Amniotic epithelial cells (AECs) have immunomodulatory and anti-inflammatory properties that may improve outcomes in cell transplantation. However, their effect on islet engraftment after intraportal co-transplantation remains unclear. We evaluated the impact of co-transplanting syngeneic 600 islet equivalents (IEQs) with human AECs (hAECs) via the portal vein in a rat streptozotocin-induced diabetes model. The co-transplantation (Co-Tx) group showed normalization of blood glucose levels within 7 days after transplantation, sustained normoglycemia thereafter, and achieved a higher diabetes reversal rate than controls (100% vs. 71.4%, p < 0.01). Serum CXCL1 levels were significantly lower in the Co-Tx group indicating suppression of early inflammatory responses. Thrombin-antithrombin complex (TAT) levels also tended to be lower, raising the possibility of attenuation of the instant blood-mediated inflammatory reaction (IBMIR). In contrast, no significant differences were observed in VEGF levels or intrahepatic microvascular density. Co-transplantation with hAECs enhances islet engraftment likely through suppression of early inflammation, highlighting their potential as an adjunctive cellular therapy in islet transplantation.