Cell transplantation therapy for diabetes is limited by an inadequate supply of cells exhibiting glucose-responsive insulin secretion. To generate an unlimited supply of human β-cells, inducibly transformed pancreatic β-cell lines have been created by expression of dominant oncogenes. The cell lines grow indefinitely but lose differentiated function. Induction of β-cell differentiation was achieved by stimulating the signaling pathways downstream of the transcription factor PDX-1, cell-cell contact, and the glucagon-like peptide (GLP-1) receptor. Synergistic activation of those pathways resulted in differentiation into functional β-cells exhibiting glucose-responsive insulin secretion in vitro. Both oncogene-expressing and oncogene-deleted cells were transplanted into nude mice and found to exhibit glucose-responsive insulin secretion in vivo. The ability to grow unlimited quantities of human β-cells is a major step toward developing a cell transplantation therapy for diabetes.