Diabetes mellitus, which affects more than 463 million people globally, is caused by the autoimmune ablation or functional loss of insulin-producing β-cells, and prevalence is projected to continue rising over the next decades. Generating β-cells to mitigate the aberrant glucose homeostasis manifested in the disease has remained elusive. Substantial advances have been made in producing mature β-cells from human pluripotent stem cells that respond appropriately to dynamic changes in glucose concentrations in vitro and rapidly function in vivo following transplantation in mice. Other potential avenues to produce functional β-cells include: transdifferentiation of closely related cell types (for example, other pancreatic islet cells such as α-cells, or other cells derived from endoderm); the engineering of non-β-cells that are capable of modulating blood sugar; and the construction of synthetic ‘cells’ or particles mimicking functional aspects of β-cells. This Review focuses on the current status of generating β-cells via these diverse routes, highlighting the unique advantages and challenges of each approach. Given the remarkable progress in this field, scalable bioengineering processes are also discussed for the realization of the therapeutic potential of derived β-cells.