Gene therapy, developing rapidly as a result of advances in molecular biology and the Human Genome Project, is now highlighted as a most hopeful technology of the 21st century. The major goal of gene therapy in diabetes mellitus (DM) is to maintain euglycemia in face of wide variations in dietary intake. Although some obstacles remain to be overcome, the risk-benefit ratio of gene therapy in DM is better than that of lifelong injections of insulin, and islet transplantation, which faces the problems of donor shortage and rejection. This review focuses on the recent advances in gene therapy of insulin-requiring diabetes, with particular emphasis on 1. the gene delivery systems by viral vectors, since most gene therapy approaches for DM involve the use of viral vectors, paying special attention to current efforts to overcome the disadvantages of adenovirus, adenovirus-associated virus and retrovirus vectors and targeting gene delivery for optimal efficiency of gene expression, 2. coupling the synthesis and release of the transgene insulin to serum glucose concentrations, especially with reference to the current promoters controlling at transcriptional level the ectopic insulin expression in autologous hepatocytes, 3. β-cell replacement strategies: engineering of β-cells, especially those derived from pluripotent stem cells, non β-cells, and on a new comer, the K cells. Recent advances in the use of stem cells for potential application in diabetes gene therapy are also discussed.