Diabetes is a chronic autoimmune disease that affects 4-5% of the world's population. If the present trends continue, diabetes would soon become a major/leading health problem worldwide. Hence there is an urgent need to develop novel approaches for the treatment of diabetes. While transplantation of the pancreas or that of isolated pancreatic islets can lead to the cure of the disease in some patients, immunological complications and the chronic shortage of donors makes it impossible to adequately treat all patients. Interestingly, embryonic stem cells (ESC) have emerged as a possible source of pluripotent cells that can be coaxed into insulin-producing cells (IPCs) that can be used to treat diabetes. However, until appropriate protocols have been established, this new technology will be difficult to tap into. Our laboratory is interested in developing new strategies for harnessing the pluripotency of ESC and differentiating them into IPCs that are stable and will continue to produce insulin in vivo. A second aspect is the non-availability of non-invasive imaging protocols. We show here that transcriptionally targeted luciferase expression can be used successfully to non-invasively monitor the transplanted cells in vivo.