UNLABELLED: The PEC-01 cell population, differentiated from human embryonic stem cells (hESCs), contains pancreatic progenitors (PPs) that, when loaded into macroencapsulation devices (to produce the VC-01 candidate product) and transplanted into mice, can mature into glucose-responsive insulin-secreting cells and other pancreatic endocrine cells involved in glucose metabolism. We modified the protocol for making PEC-01 cells such that 73%-80% of the cell population consisted of PDX1-positive (PDX1+) and NKX6.1+ PPs. The PPs were further differentiated to islet-like cells (ICs) that reproducibly contained 73%-89% endocrine cells, of which approximately 40%-50% expressed insulin. A large fraction of these insulin-positive cells were single hormone-positive and expressed the transcription factors PDX1 and NKX6.1. To preclude a significant contribution of progenitors to the in vivo function of ICs, we used a simple enrichment process to remove remaining PPs, yielding aggregates that contained 93%-98% endocrine cells and 1%-3% progenitors. Enriched ICs, when encapsulated and implanted into mice, functioned similarly to the VC-01 candidate product, demonstrating conclusively that in vitro-produced hESC-derived insulin-producing cells can mature and function in vivo in devices. A scaled version of our suspension culture was used, and the endocrine aggregates could be cryopreserved and retain functionality. Although ICs expressed multiple important β cell genes, the cells contained relatively low levels of several maturity-associated markers. Correlating with this, the time to function of ICs was similar to PEC-01 cells, indicating that ICs required cell-autonomous maturation after delivery in vivo, which would occur concurrently with graft integration into the host. SIGNIFICANCE: Type 1 diabetes (T1D) affects approximately 1.25 million people in the U.S. alone and is deadly if not managed with insulin injections. This paper describes the production of insulin-producing cells in vitro and a new protocol for producing the cells, representing another potential cell source for a diabetes cell therapy. These cells can be loaded into a protective device that is implanted under the skin. The device is designed to protect the cells from immune rejection by the implant recipient. The implant can engraft and respond to glucose by secreting insulin, thus potentially replacing the β cells lost in patients with T1D.