Insulin-secreting pancreatic beta-cell lines represent a promising approach for treatment of insulin-dependent diabetes mellitus. Such cell lines can provide an abundant and reproducible source of beta-cell material for transplantation. A number of highly differentiated beta-cell lines have been developed using transgenic mice. These cells produce insulin amounts comparable to normal pancreatic islets and release it in response to physiological insulin secretagogues. Our laboratory has employed a reversible transformation approach to tightly regulate cell replication in these beta-cell lines, both in culture and in vivo. Beta-cell lines can be modulated by gene transfer to improve their function and survival. We have utilized adenovirus genes, which downregulate antigen presentation and increase cell resistance to cytokines, to facilitate transplantation of mouse beta cells across allogeneic barriers. These approaches could be applied to the development of human beta-cell lines by genetic engineering of isolated human islets.