The acute cell-mediated immune response presents a significant barrier to xenotransplantation. Immune-privileged Sertoli cells (SC) can prolong the survival of co-transplanted cells including xenogeneic islets, hepatocytes, and neurons by protecting them from immune rejection. Additionally, SC survive as allo- and xenografts without the use of any immunosuppressive drugs suggesting elucidating the survival mechanism(s) of SC could be used to improve survival of xenografts. In this study, the survival and immune response generated toward neonatal pig SC (NPSC) or neonatal pig islets (NPI), nonimmune-privileged controls, was compared after xenotransplantation into naïve Lewis rats without immune suppression. The NPSC survived throughout the study, while NPI were rejected within 9 days. Analysis of the grafts revealed that macrophages and T cells were the main immune cells infiltrating the NPSC and NPI grafts. Further characterization of the T cells within the grafts indicated that the NPSC grafts contained significantly more cluster of differentiation 4 (CD4) and cluster of differentiation 8 (CD8) regulatory T cells (Tregs) at early time points than the NPI grafts. Additionally, the presence of increased amounts of interleukin 10 (IL-10) and transforming growth factor (TGF) β and decreased levels of tumor necrosis factor (TNF) α and apoptosis in the NPSC grafts compared to NPI grafts suggests the presence of regulatory immune cells in the NPSC grafts. The NPSC expressed several immunoregulatory factors such as TGFβ, thrombospondin-1 (THBS1), indoleamine-pyrrole 2,3-dioxygenase, and galectin-1, which could promote the recruitment of these regulatory immune cells to the NPSC grafts. In contrast, NPI grafts had fewer Tregs and increased apoptosis and inflammation (increased TNFα, decreased IL-10 and TGFβ) suggestive of cytotoxic immune cells that contribute to their early rejection. Collectively, our data suggest that a regulatory graft environment with regulatory immune cells including CD4 and CD8 Tregs in NPSC grafts could be attributed to the prolonged survival of the NPSC xenografts.