We previously demonstrated that the utilization of an electrospun scaffold could boost functional outputs of transplanted islets. In this study, we aim to develop a drug-eluting scaffold with a payload of pioglitazone to simultaneously rein in hyperglycemia and recoup lost renal functions in diabetic mice that underwent islet transplantation. The in vivo proliferation of islets was measured by a non-invasive bio-imaging technology whereas the blood insulin, blood glucose and renal proteins were assayed. The local stimulation of transplanted islets by pioglitazone saw an accelerated in vivo proliferation without apoptosis caused by the drug-eluting scaffold. In addition, pioglitazone contributed to an increased secretion of insulin and C-peptide 2, giving rise to an accelerated rein-in of hyperglycemia and enhanced tolerance of sudden oral glucose challenge. Moreover, the accelerated decrease of blood creatinine, urine creatinine and blood urea nitrogen suggested that pioglitazone contributed to the recovery of renal functions compromised by diabetes. Our bioengineering strategy effectively ameliorated hyperglycemia and associated nephrotic disorders, and shed a new light on an engineering approach to combat diabetes.