Diabetes is the result of having inadequate supply of functional insulin-producing β cells. Two possible approaches for replenishing the β cells are: (1) replacement by transplanting cadaveric islets or β cells derived from human embryonic stem cells/induced pluripotent stem cells and (2) induction of endogenous regeneration. This review focuses on endogenous regeneration, which can follow two pathways: enhanced replication of existing β cells and formation of new β cells from cells not expressing insulin, either by conversion from a differentiated cell type (transdifferentiation) or differentiation from progenitors (neogenesis). Exciting progress on both pathways suggest that regeneration may have therapeutic promise.