Diabetes mellitus is one of the leading causes of morbidity and mortality. It is caused by an absolute insulin deficiency due to the destruction of insulin secreting pancreatic β- cells (type 1 diabetes) or by a relative insulin deficiency due to decreased insulin sensitivity, usually observed in over weight individuals (type 2 diabetes). In both types of the disease, an inadequate mass of functional β-cells is the major determinant for the onset of hyperglycemia and the development of overt diabetes The need for an essentially limitless supply of a physiologically competent substitute for primary human islets of langerhans has led to research in to the suitability of stem / progenitor cells to generate insulin producing cells to use in replacement therapies for diabeteshuman UCB stem cells can transdifferentiate into insulin producing cells in short term liquid culture supplemented with a high glucose concentration, Nicotinamide and exendin-4 in vitro. This paves the way for further in vivo study and efficient novel therapeutic modalities for diabetic patients.