Over the last years, there has been great success in driving stem cells toward insulin-expressing cells. However, the protocols developed to date have some limitations, such as low reliability and low insulin production. The most successful protocols used for generation of insulin-producing cells from stem cells mimic in vitro pancreatic organogenesis by directing the stem cells through stages that resemble several pancreatic developmental stages. Islet cell fate is coordinated by a complex network of inductive signals and regulatory transcription factors that, in a combinatorial way, determine pancreatic organ specification, differentiation, growth, and lineage. Together, these signals and factors direct the progression from multipotent progenitor cells to mature pancreatic cells. Later in development and adult life, several of these factors also contribute to maintain the differentiated phenotype of islet cells. A detailed understanding of the processes that operate in the pancreas during embryogenesis will help us to develop a suitable source of cells for diabetes therapy. In this chapter, we will discuss the main transcription factors involved in pancreas specification and beta-cell formation.