Pancreatic beta-cell failure underlies type 1 diabetes; it also contributes in an essential way to type 2 diabetes. beta-Cell replacement is an important component of any cure for diabetes. The current options of islet and pancreas transplantation are not satisfactory as definitive forms of therapy. Here, we review strategies for induced de novo pancreatic beta-cell formation, which depend on the targeted differentiation of cells into pancreatic beta-cells. With this objective in mind, one can manipulate the fate of three different types of cells: 1) from terminally differentiated cells, e.g. exocrine pancreatic cells, into beta-cells; 2) from multipotent adult stem cells, e.g. hepatic oval cells, into pancreatic islets; and 3) from pluripotent stem cells, e.g. embryonic stem cells and induced pluripotent stem cells, into beta-cells. We will examine the pros and cons of each strategy as well as the hurdles that must be overcome before these approaches to generate new beta-cells will be ready for clinical application.