For more than eighty years, insulin injection has been the only treatment option for all type I and many type II diabetic individuals. Whole pancreas transplantation has been a successful approach for some patients, but is a difficult and complex operation. Recently, it was demonstrated that a glucocorticoid-free immunosuppressive regimen led to remarkably successful islet transplantation. However, both pancreas and islet cell transplantation are limited by the tremendous shortage of cadaveric pancreases that are available for transplantation. Therefore, a major goal of diabetes research is to generate an unlimited source of cells exhibiting glucose-responsive insulin secretion that can be used for transplantation, ideally without the need for systemic immunosuppression. The focus of this review is on how gene therapy can be used in beta cell replacement strategies. Gene transfer to beta cells as well as recent advances in beta cell growth and development will be discussed.