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Semi-supervised instance segmentation poses challenges due to limited labeled data, causing difficulties in accurately localizing distinct object instances. Current teacher-student frameworks still suffer from performance constraints due to unreliable pseudo-label quality stemming from limited labeled data. While the Segment Anything Model (SAM) offers robust segmentation capabilities at various granularities, directly applying SAM introduces challenges such as class-agnostic predictions and potential over-segmentation. To address these complexities, we carefully integrate SAM into the semi-supervised instance segmentation framework, developing a novel distillation method that effectively captures the precise localization capabilities of SAM without compromising semantic recognition. Furthermore, we incorporate pseudo-label refinement as well as a specialized data augmentation with the refined pseudo-labels, resulting in superior performance. We establish state-of-the-art performance, and provide comprehensive experiments and ablation studies to validate the effectiveness of our proposed approach.