Type 1 diabetes mellitus results from a cell-mediated autoimmune attack against pancreatic beta-cells. Traditional treatments involve numerous daily insulin dosages/injections and rigorous glucose control. Many efforts toward the identification of beta-cell precursors have been made not only with the aim of understanding the physiology of islet regeneration, but also as an alternative way to produce beta-cells to be used in protocols of islet transplantation. In this review, we summarize the most recent studies related to precursor cells implicated in the regeneration process. These include embryonic stem cells, pancreas-derived multipotent precursors, pancreatic ductal cells, hematopoietic stem cells, mesenchymal stem cells, hepatic oval cells, and mature beta-cells. There is controversial evidence of the potential of these cell sources to regenerate beta-cell mass in diabetic patients. However, clinical trials using embryonic stem cells, umbilical cord blood or adult bone marrow stem cells are under way. The results of various immunosuppressive regimens aiming at blocking autoimmunity against pancreatic beta-cells and promoting beta-cell preservation are also analyzed. Most of these regimens provide transient and partial effect on insulin requirements, but new regimens are beginning to be tested. Our own clinical trial combines a high dose immunosuppression with mobilized peripheral blood hematopoietic stem cell transplantation in early-onset type 1 diabetes mellitus.