Type 1 diabetes (T1D) is an autoimmune disease, leading to pancreatic β-cell destruction and loss of glycaemic control. Administration of exogenous insulin to diabetic patients prevents life-threatening metabolic derangement, but may fail to prevent other longterm complications, such as kidney failure or diabetic retinopathy. Islet transplantation is a low-risk surgical procedure, affording improved glucose homeostasis provided sufficient islets engraft in the liver. Here we review work on the use of stem cells to generate β- cells for islet transplantation, indicating the need for improved protocols for their derivation and full maturation. We also consider recent evidence indicating that adult stem/progenitor cells may affect islet transplantation by improving the viability of engrafted islets and controlling immune reactions to islet allo- and auto-antigens, extending stem-cell use in T1D beyond the regenerative approach.