In both Type 1 and 2 diabetes, insufficient numbers of insulin-producing beta-cells are a major cause of defective control of blood glucose and its complications. Restoration of damaged beta-cells by endocrine pancreas regeneration would be an ideal therapeutic option. The possibility of generating insulin-secreting cells with adult pancreatic stem or progenitor cells has been investigated extensively. The conversion of differentiated cells such as hepatocytes into beta-cells is being attempted using molecular insights into the transcriptional make-up of beta-cells. Additionally, the enhanced proliferation of beta-cells in vivo or in vitro is being pursued as a strategy for regenerative medicine for diabetes. Advances have also been 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 bridged before a therapeutic application is made possible.