The objective of this study is to optimize the cryopreservation of dissociated islet cells and obtain functional cells that can be used in single-cell transcriptome studies on the pathology and treatment of diabetes. Using an iterative graded freezing approach we obtained viable cells after cooling in 10% dimethyl sulfoxide and 6% hydroxyethyl starch at 1°C/min to -40°C, storage in liquid nitrogen, rapid thaw, and removal of cryoprotectants by serial dilution. The expression of epithelial cell adhesion molecule declined immediately after thaw, but recovered after overnight incubation, while that of an endocrine cell marker (HPi2) remained high after cryopreservation. Patch-clamp electrophysiology revealed differences in channel activities and exocytosis of various islet cell types; however, exocytotic responses, and the biophysical properties of voltage-gated Na+ and Ca2+ channels, are sustained after cryopreservation. Single-cell RNA sequencing indicates that overall transcriptome and crucial exocytosis genes are comparable between fresh and cryopreserved dispersed human islet cells. Thus, we report an optimized procedure for cryopreserving dispersed islet cells that maintained their membrane integrity, along with their molecular and functional phenotypes. Our findings will not only provide a ready source of cells for investigating cellular mechanisms in diabetes but also for bio-engineering pseudo-islets and islet sheets for modeling studies and potential transplant applications.