Diabetes mellitus is the most prevailing disease with progressive incidence 
worldwide. To date, the pathogenesis of diabetes is far to be understood, and 
there is no permanent treatment available for diabetes. One of the promising 
approaches to understand and cure diabetes is to use pluripotent stem cells 
(PSCs), including embryonic stem cells (ESCs) and induced PCSs (iPSCs). ESCs and 
iPSCs have a great potential to differentiate into all cell types, and they have 
a high ability to differentiate into insulin-secreting β cells. Obtaining PSCs 
genetically identical to the patient presenting with diabetes has been a 
longstanding dream for the in vitro modeling of disease and ultimately cell 
therapy. For several years, somatic cell nuclear transfer (SCNT) was the method 
of choice to generate patient-specific ESC lines. However, this technology faces 
ethical and practical concerns. Interestingly, the recently established iPSC 
technology overcomes the major problems of other stem cell types including the 
lack of ethical concern and no risk of immune rejection. Several iPSC lines have 
been recently generated from patients with different types of diabetes, and most 
of these cell lines are able to differentiate into insulin-secreting β cells. In 
this review, we summarize recent advances in the differentiation of pancreatic β 
cells from PSCs, and describe the challenges for their clinical use in diabetes 
cell therapy. Furthermore, we discuss the potential use of patient-specific PSCs 
as an in vitro model, providing new insights into the pathophysiology of 
diabetes.