Present-day treatments for people that are insulin dependent require multiple insulin injections, sometimes with an insulin pump, coupled with regular blood glucose monitoring. The availability of modified insulins, each with peaks of activity at varying times, has improved diabetes management. On the other hand, there have been impressive results leading to insulin independence by transplantation of cadaveric islets coupled with immune suppression. This review focuses on the possibility of treating diabetes with cellular transplants, specifically with the use of pluripotent stem cells, to produce a virtually unlimited and uniform supply of human islet-like clusters by directed differentiation. Prospects for improving the in vitro differentiation of human endocrine cells for the study of endocrine function and their possible clinical uses are also discussed.