In both type 1 and type 2 diabetes, insufficient numbers of insulin-producing beta cells are a major cause of defective control of blood glucose and its complications. Accordingly, therapies that increase functional beta-cell mass may offer a cure for diabetes. Efforts to achieve this goal explore several directions. Based on the realization that beta cells are capable of significant proliferation throughout adult life, the enhanced proliferation of beta cells in vivo or in vitro is pursued as a strategy for regenerative medicine for diabetes. Alternatively, the conversion of differentiated cells such as hepatocytes into beta cells is being attempted using molecular insights into the transcriptional makeup of beta cells. Advances were also made in directing the differentiation of embryonic stem cells into beta cells. Although progress is encouraging, major gaps in our understanding of developmental biology of the pancreas and adult beta-cell dynamics remain to be closed before a therapeutic application is made possible.