Differentiation of stem cells into insulin secreting beta-like cells holds great promise to treat diabetes. Current protocols drive the cells through stages of maturation and produce cells that secrete insulin. However, these cells still lack many of the characteristics of native beta cells. One important influence on native cell responses is the capillary basement membrane. Whether the stem cell-derived spheroids contain basement membrane and whether it plays any role in the cell responses is unknown. Here we show the spheroids do contain basement membrane proteins as a diffuse web-like structure. We demonstrate that the beta-like cells within the spheroid do not respond to this basement membrane and show no evidence for the cell polarization that characterizes native cells. We then isolated cells from the mature spheroids and show that culture on basement membrane protein coated dishes does impose cell polarity and favourably alters glucose dependent insulin secretion. We also show that cells cultured on the inner surface of basement membrane coated polymer devices survive implantation in a mouse and retain their identity. We conclude that the introduction of basement membrane and controlling the environment around stem cell-derived beta cells is a valuable route towards better phenocopying the native responses.