Type 1 diabetes involves the immunologically mediated destruction of insulin‑producing cells (IPCs) in the pancreatic islet. Mesenchymal stem cells (MSCs) have the ability to differentiate into IPCs and have become the most promising means for diabetes therapy. The present study demonstrated that human adipose‑derived stem cells (hADSCs) and human amniotic MSCs (hAMSCs) are able to differentiate into functional IPCs by knocking down neuronal restrictive silencing factor (NRSF) and Sonic hedgehog (SHH). In the current study, PEI@Fe3O4 nanoparticles (NPs) were used to deliver NRSF small interfering (si)RNA and SHH siRNA to hADSCs and hAMSCs. Following infection with PEI@Fe3O4 NPs containing NRSF siRNA and SHH siRNA, the MSCs were induced to differentiate into IPCs. Four specific genes for islet cells were expressed in the differentiated cells. These cells also produced and released insulin in a glucose‑responsive manner. These findings indicated that hADSCs and hAMSCs may be induced to differentiate into IPCs via PEI@Fe3O4 NP‑mediated NRSF and SHH silencing.