β-Cell replacement for type 1 diabetes (T1D) can restore normal glucose homeostasis, thereby eliminating the need for exogenous insulin and halting the progression of diabetes complications. Success in achieving insulin independence following transplantation of cadaveric islets fueled academic and industry efforts to develop techniques to mass produce β cells from human pluripotent stem cells, and these have now been clinically validated as an alternative source of regulated insulin production. Various encapsulation strategies are being pursued to contain implanted cells in a retrievable format, and different implant sites are being explored with some strategies reaching clinical studies. Stem cell lines, whether derived from embryonic sources or reprogrammed somatic cells, are being genetically modified for designer features, including immune evasiveness to enable implant without the use of chronic immunosuppression. Although hurdles remain in optimizing large-scale manufacturing, demonstrating efficacy, durability, and safety, products containing stem cell-derived β cells promise to provide a potent treatment for insulin-dependent diabetes.