Type 1 diabetes is characterized by the selective destruction of pancreatic beta-cells caused by an autoimmune attack. Type 2 diabetes is a more complex pathology which, in addition to beta-cell loss caused by apoptotic programs, includes beta-cell dedifferentiation and peripheric insulin resistance. beta-Cells are responsible for insulin production, storage and secretion in accordance to the demanding concentrations of glucose and fatty acids. The absence of insulin results in death and therefore diabetic patients require daily injections of the hormone for survival. However, they cannot avoid the appearance of secondary complications affecting the peripheral nerves as well as the eyes, kidneys and cardiovascular system. These afflictions are caused by the fact that external insulin injection does not mimic the tight control that pancreatic-derived insulin secretion exerts on the body's glycemia. Restoration of damaged beta-cells by transplantation from exogenous sources or by endocrine pancreas regeneration would be ideal therapeutic options. In this context, stem cells of both embryonic and adult origin (including beta-cell/islet progenitors) offer some interesting alternatives, taking into account the recent data indicating that these cells could be the building blocks from which insulin secreting cells could be generated in vitro under appropriate culture conditions. Although in many cases insulin-producing cells derived from stem cells have been shown to reverse experimentally induced diabetes in animal models, several concerns need to be solved before finding a definite medical application. These refer mainly to the obtainment of a cell population as similar as possible to pancreatic beta-cells, and to the problems related with the immune compatibility and tumor formation. This review will summarize the different approaches that have been used to obtain insulin-producing cells from embryonic and adult stem cells, and the main problems that hamper the clinical applications of this technology.