Human pluripotent stem cell (hPSC)-derived islet cells provide promising resources for diabetes studies, cell replacement treatment and drug screening. Recently, hPSC-derived organoids have represented a new class of in vitro organ models for disease modeling and regenerative medicine. However, rebuilding biomimetic human islet organoids from hPSCs remains challenging. Here, we present a new strategy to engineer human islet organoids derived from human induced pluripotent stem cells (hiPSCs) using an organ-on-a-chip platform combined with stem cell developmental principles. The microsystem contains a multi-layer microfluidic device that allows controllable aggregation of embryoid bodies (EBs), in situ pancreatic differentiation and generation of heterogeneous islet organoids in parallel under perfused 3D culture in a single device. The generated islet organoids contain heterogeneous islet-specific α and β-like cells that exhibit favorable growth and cell viability. They also show enhanced expression of pancreatic β-cell specific genes and proteins (PDX1 and NKX6.1) and increased β-cell hormone specific INS gene and C-peptide protein expressions under perfused 3D culture conditions compared to static cultures. In addition, the islet organoids exhibit more sensitive glucose-stimulated insulin secretion (GSIS) and higher Ca2+ flux, indicating the role of biomimetic mechanical flow in promoting endocrine cell differentiation and maturation of islet organoids. This islet-on-a-chip system is robust and amenable to real-time imaging and in situ tracking of islet organoid growth, which may provide a promising platform for organoid engineering, disease modeling, drug testing and regenerative medicine.