Isomalt is produced by turning normal sugar into a chemical that the human body treats as a dietary fiber. Because of this, it does not produce an insulin response and is safe for diabetics. Isomalt is also undigestable by oral bacteria, reducing the damage they can cause to teeth and gums (and through remineralisation, it even helps to build dental enamel, thus reducing the formation of plaque). Isomalt is a registered trademark of Palatinit.
In cooking, isomalt can be substituted 1:1 for granulated sugar, and since it is made from sugar, it performs almost identically in most tasks. This makes isomalt an ideal substitute for sugar if you are cooking for diabetics, or are just trying to make low calorie food.
Isomalt is used in some processed foods, such as Quest bars. It is also used heavily in the art of pulled or blown sugar because it maintains a workable texture for longer, does not get as sticky, and has a stronger crystaline structure.