A drug used to prevent rejection of transplanted organs is showing promise as an alternative to insulin treatment for some diabetics.

The drug, cyclosporine, appears to protect the body's insulin-producing islet cells from attack by the body's own immune system in people with type I diabetes.

People who become diabetic in middle age or later often do not need insulin, but those with type I diabetes -- the form of the disease that strikes children, teen-agers and younger adults -- must take it for the rest of their lives.

The treatment idea is based on growing evidence that type I diabetes is one of a class of so-called autoimmune disorders in which the immune system attacks some bodily tissue because it mistakenly perceives it as harmful.

Just as cyclosporine protects organ grafts against rejection, scientists say, so it will also prevent the rejection and consequent destruction of the insulin-producing cells. Progress reports on this subject were among the highlights of the Second International Congress on Cyclosporine, held in Washington earlier this month.

Dr. Calvin Stiller of the University of Western Ontario in London, Ont. pioneered this diabetic therapy in 1982 and was followed by Dr. Jean-Franc ois Bach of the Universite' Rene Descartes in Paris in 1984. They and their colleagues told the meeting that while it is too soon to tell if cyclosporine will be better than insulin injections, the results so far are promising.

Of the estimated 11 million Americans who have diabetes, about 300,000 to 500,000 are thought to have the type I form, according to the National Institute of Arthritis, Diabetes, and Digestive and Kidney Diseases.

One reason for the optimism about cyclosporine is that it does, in fact, stop destruction of the islets in 60 to 80 percent of type I diabetics now given this experimental therapy, up from only 30 to 40 percent when it was originally tried.

These patients have had to stay on a diabetic diet. But they have been able to go off insulin, thereby avoiding the fainting episodes that can result from sugar imbalance.

Exciting too, is the possibility that patients with type I diabetes will be healthier in the long run on cyclosporine than on insulin. While life-prolonging, insulin is not a cure for diabetes. The disease is the leading cause of blindness in Americans under 60, and because it impairs circulation also necessitates many amputations of the feet and legs.

Patients are also prone to early stroke, kidney failure, heart attacks and blood vessel disorders, which shorten their life expectancy. As Stiller put it: "If you have type I diabetes, your chances of dying in any given year are five to 10 times greater than normal."

Doctors hope cyclosporine, by maintaining the body's own production of insulin, will eliminate or reduce the frequency of these complications.

But they caution that cyclosporine therapy has its own limitations.

For example, once a patient has the first signs of type I diabetes -- thirst and frequent urination -- the drug must be started within two to six weeks to prevent too many islet cells being killed for the treatment to work. Prompt diagnosis is thus crucial. Indeed, said Stiller, "the success rate when therapy begins within two weeks of onset is 80 percent, but falls off dramatically after that."

Also an obstacle are cyclosporine's side effects, which include its tendency to cause the growth of unwanted body hair. More serious is the damage the drug can do to the kidneys. If the worldwide experience with 351 patients to date is a guide, children's kidneys are less easily injured by cyclosporine than those of older patients, but even some of them may, for this reason, have to discontinue it.

Research also suggests that cyclosporine, which is far more expensive than insulin, also must be taken for life. Depending on the patient's weight, a year's supply of the drug -- made only by the sponsors of the recent meeting, the Sandoz Corp. -- now costs $4,000 or more. Insulin treatment, including the cost of syringes, urine tests, blood tests and other supplies, can come to $2,500 a year, Stiller said.

Cyclosporine's price is expected to fall when the patent on it expires in 1989 and competitors can enter the market. --