Almost 50 years ago, scientists developed the bi-hormonal abnormality hypothesis, stating that diabetes is not caused merely by the impaired insulin signaling. Instead, the presence of inappropriate level of glucagon is a prerequisite for the development of type 1 diabetes (T1D). It is widely understood that the hormones insulin and glucagon, secreted by healthy β and α cells respectively, operate in a negative feedback loop to maintain the body's blood sugar levels. Despite this fact, traditional T1D treatments rely solely on exogenous insulin injections. Furthermore, research on cell-based therapies and stem-cell derived tissues tends to focus on the replacement of β cells alone. In vivo, the pancreas is made up of 4 major endocrine cell types, that is, insulin-producing β cells, glucagon-producing α cells, somatostatin-producing δ cells, and pancreatic polypeptide-producing γ cells. These distinct cell types are involved synergistically in regulating islet functions. Therefore, it is necessary to produce a pancreatic islet organoid in vitro consisting of all these cell types that adequately replaces the function of the native islets. In this review, we describe the unique function of each pancreatic endocrine cell type and their interactions contributing to the maintenance of normoglycemia. Furthermore, we detail current sources of whole islets and techniques for their long-term expansion and culture. In addition, we highlight a vast potential of the pancreatic islet organoids for transplantation and diabetes research along with updated new approaches for successful transplantation using stem cell-derived islet organoids.