AbstractStem cell therapy holds immense promise for the treatment of patients with diabetes mellitus. Research on the ability of human embryonic stem cells to differentiate into islet cells has defined the developmental stages and transcription factors involved in this process. However, the clinical applications of human embryonic stem cells are limited by ethical concerns, as well as the potential for teratoma formation. As a consequence, alternative forms of stem cell therapies, such as induced pluripotent stem cells, umbilical cord stem cells and bone marrow-derived mesenchymal stem cells, have become an area of intense study. Recent advances in stem cell therapy may turn this into a realistic treatment for diabetes in the near future.