One promising approach for the cure of diabetes is the replacement of lost insulin-expressing beta cells by cell or regenerative therapy. The recent development of an effective islet transplantation procedure has focused attention on the limiting supply of beta cells. Various sources for new beta cells are therefore being considered, including embryonic stem cells, adult stem cells and transdifferentiation of certain types of differentiated cells, so far with limited success. The major physiological mechanism for adult beta cell formation was recently shown to be beta cell proliferation. This finding underscores the potential use of terminally differentiated beta cells as a starting material for enhancement of beta cell mass.