Embryonic stem cells (ESCs) can be derived from unused cultured human embryos, provided by patients undergoing treatment for infertility, that would otherwise be disposed of. The inner cell mass cells form immortal pluripotent cell colonies that may be directed into a wide range of cell lineages and end-differentiated cell types. Endocrine lineages are now being actively explored, particularly for their potential to differentiate into pancreatic insulin-producing cells. The majority of published research involving stem cell-directed differentiation into pancreatic islet cells has been conducted using mouse ESCs. The evidence shows that cells that are glucose-responsive for insulin release can be produced using differentiation strategies involving a sequence of growth factor-directed steps. However, because of the close association between neural and pancreatic cell types and markers, it is possible that many of the cells produced by these strategies may be more neural than pancreatic. Thus, it is important to replicate the normal developmental pathways that include the sequential expression of appropriate endoderm and pancreatic progenitor markers. Human pancreatic differentiation from ESCs may require instruction from embryonic mesenchyme to enable the complete maturation of early pancreatic cells and the formation of true β-islet cells.