Insulin-dependent diabetes mellitus (IDDM) is an autoimmune disease resulting in destruction of the pancreatic beta-cells in the islets of Langerhans. Commonly employed treatment of IDDM requires periodic insulin therapy, which is not ideal because of its inability to prevent chronic complications such as nephropathy, neuropathy and retinopathy. Although pancreas or islet transplantation are effective treatments that can reverse metabolic abnormalities and prevent or minimize many of the chronic complications of IDDM, their usefulness is limited as a result of shortage of donor pancreas organs. Gene therapy as a novel field of medicine holds tremendous therapeutic potential for a variety of human diseases including IDDM. This review focuses on the liver-based gene therapy for generation of surrogate pancreatic beta-cells for insulin replacement because of the innate ability of hepatocytes to sense and metabolically respond to changes in glucose levels and their high capacity to synthesize and secrete proteins. Recent advances in the use of gene therapy to prevent or regenerate beta-cells from autoimmune destruction are also discussed.