Closed-loop insulin delivery in individuals with diabetes can potentially lead to near-normal glucose profiles. To this end, existing subcutaneous glucose sensors and external insulin pumps can be linked with an insulin delivery algorithm to create a completely automated closed-loop system. This paper reviews current research into the development of such a system, with particular emphasis on creating a system emulating the physiological properties of the beta-cell. Issues related to using subcutaneous interstitial fluid for glucose sensing and insulin delivery are reviewed. Criteria for optimising the system are discussed using historical data. Existing strategies for open-loop pump therapy are presented with the objective of defining a path to advance from the existing physician/patient determined insulin therapy to a completely automated system.