Pancreatic β-cell failure due to a reduction in function and mass has been defined as a primary contributor to the progression of type 2 diabetes (T2D). Reserving insulin-producing β-cells and hence restoring insulin production are gaining attention in translational diabetes research, and β-cell replenishment has been the main focus for diabetes treatment. Significant findings in β-cell proliferation, transdifferentiation, pluripotent stem cell differentiation, and associated small molecules have served as promising strategies to regenerate β-cells. In this review, we summarize current knowledge on the mechanisms implicated in β-cell dynamic processes under physiological and diabetic conditions, in which genetic factors, age-related alterations, metabolic stresses, and compromised identity are critical factors contributing to β-cell failure in T2D. The article also focuses on recent advances in therapeutic strategies for diabetes treatment by promoting β-cell proliferation, inducing non-β-cell transdifferentiation, and reprograming stem cell differentiation. Although a significant challenge remains for each of these strategies, the recognition of the mechanisms responsible for β-cell development and mature endocrine cell plasticity and remarkable advances in the generation of exogenous β-cells from stem cells and single-cell studies pave the way for developing potential approaches to cure diabetes.