The recent success in restoring normoglycemia in type 1 diabetes by islet cell transplantation indicates that cell replacement therapy of this severe disease is achievable. However, the severe lack of donor islets has increased the demand for alternative sources of -cells, such as adult and embryonic stem cells. Here, we investigate the potential of human embryonic stem cells (hESCs) to differentiate into -cells. T he pancreatic islets of Langerhans originate from definitive endoderm. The path from definitive endoderm to the mature hormone-producing islet cell types is complex and involves sequential cell-fate decisions, including formation of pancreatic endoderm, endocrine progenitors, and hormone-producing islet cell types, including -cells. Systematic studies of the developmental biology of the pancreas have generated important knowledge about the lineage relationship between the different pancreatic cell types and the transcriptional machinery that regulates cell-type specification (1-3). In addition, important information about the extracellular signals that orchestrate pancreatic cell differentiation and morphogenesis has recently emerged (2,4). However, much remains to be learned about the extracellular cues that specify, maintain, expand, and differentiate endocrine progenitors. Taking these facts into account, the objective to in vitro control differentiation of undifferentiated embryonic stem cells into bona fide pancreatic -cells via the sequential cell-fate decisions that operate during normal -cell development will be a challenging task.The potential use of human embryonic stem cells (hESCs) as a source for new -cells in cell replacement therapy of type 1 diabetes and as a tool to study human -cell development has created great interest in devising strategies for coaxing hESCs into pancreatic -cells. The rationale for the former is that cell replacement therapy of this severe disease already exists in the form of islet transplantation, but cadaveric islets available from donors are insufficient for the present and future need in islet transplantation. Thus, the unique nature of hESCs to either self-renew or differentiate into most of our cell types, presumably also islet cell types, including -cells, suggests that these cells could potentially supply an unlimited source of transplantable islet cells in the future.Recent studies have shown that insulin ϩ cells can be generated from embryonic stem cells by the use of different experimental strategies (5-14). For example, spontaneous differentiation of mouse embryonic stem cells resulted in ineffective differentiation of insulin-producing cells (8). The most frequently used approach is based on the findings that similar mechanisms operate to control the development of both the central nervous system and the pancreas (15-17) and that insulin-producing cells have been observed in the nervous system of invertebrates (18 -20) and in primary cell cultures from mammalian fetal brain (21). Specifically, embryonic stem cells were induced to different...