Diabetes mellitus is one of the most serious public health challenges of the twenty-first century. Allogenic islet transplantation is an efficient therapy for type 1 diabetes. However, immune rejection, side effects of immunosuppressive treatment as well as lack of sufficient donor organs limits its potential. In recent years, several promising approaches for generation of new pancreatic β cells have been developed. This review provides an overview of current status of pancreatic and extra-pancreatic stem cells differentiation into insulin-producing cells and the possible application of these cells for diabetes treatment. The PubMed database was searched for English language articles published between 2001 and 2012, using the keyword combinations: diabetes mellitus, differentiation, insulin-producing cells, stem cells.