Diabetes mellitus affects millions of people in the United States and worldwide. It has become clear over the past decade that the chronic complications of diabetes result from lack of proper blood glucose concentration regulation, and particularly the toxic effects of chronic hyperglycemia on organs and tissues. Pancreas transplants can cure insulin-dependent diabetes mellitus (IDDM). Furthermore, recent advances in pancreatic islet isolation and immunosuppressive regimens have resulted in dramatic improvements in the survival and function of islet allografts. Therefore, islet replacement strategies are becoming increasingly attractive options for patients at risk for severe diabetic complications. A major limitation of these approaches is the small number of organs available for transplantation or islet isolation. Thus, an important next step in developing curative treatments for type I diabetes will be the generation of a replenishable source of glucose-responsive, insulin-secreting cells that can be used for beta cell replacement. This review focuses on approaches to developing robust and widely applicable beta-cell replacement strategies with an emphasis on manipulating b-cell growth and differentiation by genetic engineering.