Islet grafts have demonstrated that patients with diabetes would benefit greatly by beta-cell therapy. However, the paucity of available islets for transplantation as well as the immunological barriers faced in allogeneic transplantation represent a tremendous barrier to regenerative approaches to the treatment of diabetes. Here, we present a strategy and protocols to transdifferentiate developmentally related hepatocytes into beta-cells by the ectopic expression of critical beta-cell transcription factors.