Type 1 diabetes is a chronic autoimmune disease affecting nearly 35 million people. This disease develops as T-cells continually attack the β-cells of the islets of Langerhans in the pancreas, which leads to β-cell death, and steadily decreasing secretion of insulin. Lowered levels of insulin minimize the uptake of glucose into cells, thus putting the body in a hyperglycemic state. Despite significant progress in the understanding of the pathophysiology of this disease, there is a need for novel developments in the diagnostics and management of type 1 diabetes. Extracellular vesicles (EVs) are lipid-bound nanoparticles that contain diverse content from their cell of origin and can be used as a biomarker for both the onset of diabetes and transplantation rejection. Furthermore, vesicles can be loaded with therapeutic cargo and delivered in conjunction with a transplant to increase cell survival and long-term outcomes. Crucially, several studies have linked EVs and their cargos to the progression of type 1 diabetes. As a result, gaining a better understanding of EVs would help researchers better comprehend the utility of EVs in regulating and understanding type 1 diabetes. EVs are a composition of biologically active components such as nucleic acids, proteins, metabolites, and lipids that can be transported to particular cells/tissues through the blood system. Through their varied content, EVs can serve as a flexible aid in the diagnosis and management of type 1 diabetes. In this review, we provide an overview of existing knowledge about EVs. We also cover the role of EVs in the pathogenesis, detection, and treatment of type 1 diabetes and the function of EVs in pancreas and islet β-cell transplantation.