Type 1 diabetes is caused by autoimmune destruction of pancreatic islet beta-cells. Management of this disease is burdensome both to the individual and society, costing over 100 billion US dollars annually. Shortage of pancreatic tissue, together with a lifetime requirement of immunosuppressive drugs to prevent rejection and recurrent disease, remain as major hurdles yet to be overcome prior to widespread applicability. Stem cells, with their potential of developing into pancreatic beta-cells, appear to be the best prospect for overcoming the islet shortage. Current investigation, however (both embryonic and adult stem cells), is still in the preliminary stage and several more years remain before they can potentially be used in the clinical setting. Procedures that reduce in vitro manipulation of cells and allow stem cells to develop into islets in vivo are crucial. Furthermore, the regeneration of existing islets is a distinct possibility. Simplistically, it might be hypothesized that down-regulation of autoimmunity may give the pancreas the breathing space to regenerate islets. Supplementation with factors known to induce beta-cell replication and neogenesis might further augment the regenerative processes. Clearly, islet-regeneration research will soon match the level of interest currently focused on in vitro stem cell-based approaches.