Type 1 and type 2 diabetes mellitus together are predicted to affect over 300 million people worldwide by the year 2020. A relative or absolute paucity of functional β-cells is a central feature of both types of disease, and identifying the pathways that mediate the embryonic origin of new β-cells and mechanisms that underlie the proliferation of existing β-cells are major efforts in the fields of developmental and islet biology. A poor secretory response of existing β-cells to nutrients and hormones and the defects in hormone processing also contribute to the hyperglycemia observed in type 2 diabetes and has prompted studies aimed at enhancing β-cell function. The factors that contribute to a greater susceptibility in aging individuals to develop diabetes is currently unclear and may be linked to a poor turnover of β-cells and/or enhanced susceptibility of β-cells to apoptosis. This review is an update on the recent work in the areas of islet/β-cell regeneration and hormone processing that are relevant to the pathophysiology of the endocrine pancreas in type 1, type 2 and obesity-associated diabetes.