Diabetes mellitus is characterized by either the inability to produce insulin (type 1 diabetes) or as insensitivity to insulin secreted by the body (type 2 diabetes). In either case, the body is unable to move blood glucose efficiently across cell membranes to be used. This leads to a variety of local and systemic detrimental effects. Current treatments for diabetes focus on exogenous insulin administration and dietary control. Here, we describe a potential cure for diabetes using a cellular therapy to ameliorate symptoms associated with both reduced insulin secretion and insulin sensitivity. Using induced pluripotent stem (iPS) cells, we were able to derive β-like cells similar to the endogenous insulin-secreting cells in mice. These β-like cells secreted insulin in response to glucose and corrected a hyperglycemic phenotype in two mouse models of type 1 and 2 diabetes via an iPS cell transplant. Long-term correction of hyperglycemia was achieved, as determined by blood glucose and hemoglobin A1c levels. These data provide an initial proof of principle for potential clinical applications of reprogrammed somatic cells in the treatment of diabetes type 1 or 2.