Patients with type 1 diabetes mellitus are associated with impairment in vitamin A metabolism. This study evaluated whether treatment with retinoic acid, the biologically active metabolite of vitamin A, can ameliorate diabetes. All-trans retinoic acid (atRA) was used to treat streptozotocin (STZ)-induced diabetic mice which revealed atRA administration ameliorated blood glucose levels of diabetic mice. This hyperglycemic amelioration was accompanied by an increase in the amount of β cells co-expressed Pdx1 and insulin and by restoration of the vascular laminin expression. The atRA-induced production of vascular endothelial growth factor-A from the pancreatic islets was possibly the key factor that mediated the restoration of islet vascularity and recovery of β-cell mass. Furthermore, the combination of islet transplantation and atRA administration significantly rescued hyperglycemia in diabetic mice. These findings suggest that vitamin A derivatives can potentially be used as a supplementary treatment to improve diabetes management and glycemic control.