Abstract: Type 1 diabetes affects 4-5% of the world's population and can be reversed by pancreatic islet transplantation. However, acute shortage of organ donors, lifelong immunosuppression and chronic graft rejection currently limit greater use of this potentially curative therapy. Hence, there is an urgent need to develop novel renewable sources of insulin producing cells (IPCs). In this regard, ES cells and iPS cells offer a unique opportunity of pluripotent stem cells for the generation of unlimited supplies of IPCs that can be used for the treatment of type 1 diabetes (T1D). However, due to the current knowledge gap regarding the molecular mechanisms underlying differentiation of stem cells, robust generation of IPCs using ES cells has so far remained elusive. Our long term goal is to develop a stem cell based therapy for the treatment of type 1 diabetes. We hypothesize that pluripotent stem cells can be coaxed to differentiate into glucose-responsive IPCs. The underlying rationale is that the establishment of a lineage commitment pathway mimicking in vivo development of pancreatic islets using hES cells would ultimately lead to an unlimited supply of IPCs for the treatment of type 1 diabetes. In Specific Aim 1, we will determine whether mouse ES cells can be coaxed to generate IPCs that can correct hyperglycemia in diabetic mice. ES cells will first be driven to differentiate into pancreatic endodermal (PE) cells that can be purified by their surface expression of CXCR4. These purified IPCs will then be tested for their glucose responsiveness in vitro and in vivo. In addition, we will investigate whether ES cell-derived IPCs survive long-term in vivo. In Specific Aim 2 we will determine whether human iPS cells generate IPCs in vitro that are glucose responsive in vivo. If successful, our studies will establish pluripotent stem cells as a novel source of IPCs that can cure diabetes. Potential Impact on Veterans Health Care: Veterans are equally susceptible to T1D like the general population. Due to the shortage of donors, most of these patients hardly ever get the chance to be transplanted. Our project is directed towards developing an alternative renewable source of insulin-producing cells. These experiments are based on both mouse ES cells and on human iPS cells. If we are successful, we will establish a novel source of IPCs that will have a direct impact on the health and treatment of Veterans.