Islet-like cells derived from 1018-NT-ES line using an optimized protocol. Characterization of these cells showed that insulin and MAFA expression was lower, though the differences were not significant because of the variation in human islets. Glucagon and NGN3 expression were higher in 1018-NT-beta cell clusters than in human islets. 2% of C-peptide-positive cells were proliferating. Functionally, insulin and C-peptide content of 1018-NT-beta clusters were approximately 6 fold lower than in human islets. Nevertheless, transplanted 1018-NT-beta cells maintain normal blood glucose level in mice with STZ-induced diabetes.