The making of functional pancreatic islets in renewable numbers has been a goal of stem cell biologists since early 2000. Since that time, many studies have reported successful creation of glucose-responsive pancreatic beta-cells. Not until the more recent systematic application of developmental principles to stem cell biology systems were breakthroughs achieved on directed specification of the required early developmental intermediates. The most important first step is the formation of the definitive endoderm (DE) lineage which is compulsory for production of the epithelium of the pancreas and the other important endoderm-derived organs such as the liver, intestine and lung. The formation of DE from embryonic stem cells made possible additional experimentation aimed at directing the endoderm to further specified foregut and pancreatic endoderm lineages. With these discoveries came the first production of immature pancreatic endocrine cells. Most recently, the production in vivo of glucose-responsive insulin-producing cells with the capacity to correct Steptozotocin-induced hyperglycaemia in mice has been achieved. The work leading up to this achievement, in relation to the other principle human stem cell studies conducted in this area, will be briefly described. The necessary steps and ideal characteristics of embryonic stem cell-based differentiation to pancreatic beta-cells capable of glucose stimulated insulin secretion will be underscored.