Embryonic stem (ES) cells are a potential source of a variety of differentiated cells for cell therapy, drug discovery, and toxicology screening. Here, we present an efficacy strategy for the differentiation of mouse ES cells into insulin-producing cells (IPCs) by a two-step differentiation protocol comprising of (i) the formation of definitive endoderm in monolayer culture by activin A, and (ii) this monolayer endoderm being induced to differentiate into IPCs by nicotinamide, insulin, and laminin. Differentiated cells can be obtained within approximately 7 days. The differentiation IPCs combined application of RT-PCR, ELISA, and immunofluorescence to characterize phenotypic and functional properties. In our study, we demonstrated that IPCs produced pancreatic transcription factors, endocrine progenitor marker, definitive endoderm, pancreatic β-cell markers, and Langerhans α and δ cells. The IPCs released insulin in a manner that was dose dependent upon the amount of glucose added. These techniques may be able to be applied to human ES cells, which would have very important ramifications for treating human disease.