Embryonic stem (ES) cells have been widely heralded as a source of differentiated cells to be used in cell-replacement therapy (CRT), which has potential as a treatment for a number of degenerative diseases, including Parkinson’s disease, Alzheimer’s disease and diabetes [1–3]. The potential impact of CRT on human life is huge. Not only will healthcare systems be transformed, but a number of societal issues will emerge if cell-based therapy is fully developed. There are, however, widely diverging views as to when we can expect to see cell-based treatment for major diseases (see e.g. [4] in this issue), and over-optimistic views have been expressed in the press and elsewhere. Here I present a more pessimistic view on the amount of time that will be needed to develop CRT for the treatment of diabetes. Patients with type 1 diabetes are considered to be candidates for cell-replacement therapy (CRT), but those with advanced stages of type 2 diabetes might also benefit. Many obstacles, however, must be overcome before transplantation becomes the treatment of choice for patients newly diagnosed with diabetes. At present, only patients with poor metabolic control and a history of hypoglycaemic episodes are eligible for islet transplantation [5]. This selection is based on an unfavourable risk–benefit analysis in patients who are responding well to their current therapy of multiple daily insulin injections (i.e. patients with metabolic control sufficient to confer a low risk of secondary complications). Indeed, concerns over whether the immunosuppression needed to prevent graft rejection will be associated with serious side effects also limits the widespread use of CRT for diabetes [6]. Unless new forms of immunosuppression or encapsulation technologies with minimal side effects are developed, CRT faces a bleak future in the treatment of diabetes. The risks associated with the immune suppression must be lower than the risks of secondary complications associated with the disease itself before it will be ethically responsible to treat diabetes with CRT. It should not be forgotten that new generations of insulin analogues, and the development of closed-loop insulin delivery systems, may provide the means to improve the clinical outcome of conventional insulin therapy [7], raising further concerns as to whether the safety of future strategies to prevent graft rejection will allow a favourable risk–benefit analysis. Assuming that safe and efficient methods to prevent graft rejection are developed, a second and equally important obstacle emerges, namely the shortage of organ donors. The number of available donor pancreata per year is currently sufficient to treat only about 1 in 20 of the newly diagnosed type 1 diabetes patients in the USA each year [8] and it is obvious that an increase in donor pancreata sufficient to meet the demand is neither likely nor desirable. An alternative source of islet beta cells is therefore required before islet transplantation can be more Diabetologia (2006) 49:2537–2540 DOI 10.1007/s00125-006-0434-x