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Here we summarize recent advancements in β cell replacement as a therapy for type 1 diabetes.β cell replacement therapy has been proposed as a cure for type 1 diabetes with the introduction of the Edmonton protocol for cadaveric islet transplantation. To allow widespread use of this approach, efforts have focused on establishing an abundant source of insulin-producing β cells, protecting transplanted cells from ischemia-mediated death, immune rejection, and re-occurring autoimmunity. Recent developments addressing these issues include generation of insulin-producing cells from human pluripotent stem cells, different encapsulation strategies and prevention of ischemia upon transplant.Despite significant advances in generating functional β cells from human pluripotent stem cells, several key challenges remain in regard to the survival of β cell grafts, protection from (auto-) immune destruction and implementation of additional safety mechanisms before a stem cell-based cell replacement therapy approach can be widely applied. Taking current findings into consideration, we outline a multilayered approach to design immune-privileged β cells from stem cells using state of the art genome editing technologies that if successfully incorporated could result in great benefit for diabetic patients and improve clinical results for cell replacement therapy.