Induced pluripotent stem cell (iPSC) technology enables the creation and selection of pluripotent cells with specific genetic traits. This report describes a pluripotent cell line created specifically to form replacement pancreatic cells as a therapy for insulin-dependent diabetes. Beginning with primary pancreatic tissue acquired through organ donation, cells were isolated, re-programmed using non-integrating vectors and exposed to a four day differentiation protocol to generate definitive endoderm, a developmental precursor to pancreas. The best performing iPSC lines were then subjected to a 12-day basic differentiation protocol to generate endocrine pancreas precursors. The line that most consistently generated highly pure populations was selected for further development. This approach created an iPSC-variant cell line, SR1423, with a genetic profile correlated with preferential differentiation toward endodermal lineage at the loss of mesodermal potential. This report further describes an improved differentiation protocol that, coupled with SR1423, generated populations of greater than 60% insulin-expressing cells that secrete insulin in response to glucose and are capable of reversing diabetes in rodents. Created and banked following cGMP guidelines, SR1423 is a candidate cell line for the production of insulin-producing cells useful for the treatment of diabetes.