Transplantation of functional islets of Langerhans may emerge as a useful therapy for some patients with type 1 diabetes mellitus (DM), but donor islet shortages motivate the search for new sources of transplantable islets. Pluripotent embryonic stem (ES) cells are expandable in culture and have the potential to give rise to all cell types in the body. The recent isolation of pluripotent ES cells from humans has generated excitement over the possibility of engineering glucose-responsive islet replacement tissue from these cells in large quantities. In this study, we review the recent advances in generating insulin-producing cells (IPC) from mouse and human ES (hES) cells.