Production of beta-cells from stem cells from pluripotent stem cells have always been significantly lacking in at least one of the following properties: 1) functional properties related to insulin-production and glucose signaling response, 2) mature phenotype such as biochemical markers or cell structures, 3) efficiency in production of differentiated cells. Described herein is multistep differentiation protocol which substantially overcomes all of the existing limitations. Pluripotent stem cells, including induced pluripotent stem cells (iPSCs), and embryonic stem cells (ESCs) can be differentiated using an embryoid body (EB) formation step, followed by B maturation via endothelial cells (EC) co-culturing and incubation with a sequential series of bone morphogenic protein (BMP)-related growth factor cocktails. The resulting cells displayed functional properties, including insulin-production and glucose signaling response, and mature phenotype of C-peptide expression.
