Abstract: Diabetes mellitus is a devastating disease and the World Health Organization (WHO) expects that the number of diabetic patients will increase to 300 million by the year 2025. Patients with diabetes experience decreased insulin secretion that is linked to a significant reduction in the number of islet cells. Type 1 diabetes is characterized by the selective destruction of pancreatic ƒÒ cells caused by an autoimmune attack. Type 2 diabetes is a more complex pathology that, in addition to ƒÒ cell loss caused by apoptotic programs, includes ƒÒ cell de-differentiation and peripheric insulin resistance. The success achieved over the last few years with islet transplantation suggests that diabetes can be cured by the replenishment of deficient ƒÒ cells. These observations are proof of the concept and have intensified interest in treating diabetes or other diseases not only by cell transplantation but also by stem cells. An increasing body of evidence indicates that, in addition to embryonic stem cells, several potential adult stem/progenitor cells derived from the pancreas, liver, spleen, and bone marrow could differentiate into insulin-producing cells in vitro or in vivo. However, significant controversy currently exists in this field. Pharmacological approaches aimed at stimulating the in vivo/ex vivo regeneration of ƒÒ cells have been proposed as a way of augmenting islet cell mass. Overexpression of embryonic transcription factors in stem cells could efficiently induce their differentiation into insulin-expressing cells. A new technology, known as protein transduction, facilitates the differentiation of stem cells into insulin-producing cells. Recent progress in the search for new sources of ƒÒ cells has opened up several possibilities for the development of new treatments for diabetes.