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Summary In type 1 diabetes, a renewable source of human pancreatic β cells, in particular from human induced pluripotent stem cell (hiPSC) origin, would greatly benefit cell therapy. Earlier work showed that pancreatic progenitors differentiated from human embryonic stem cells in vitro can further mature to become glucose responsive following macroencapsulation and transplantation in mice. Here we took a similar approach optimizing the generation of pancreatic progenitors from hiPSCs. This work demonstrates that hiPSCs differentiated to pancreatic endoderm in vitro can be efficiently and robustly generated under large-scale conditions. The hiPSC-derived pancreatic endoderm cells (HiPECs) can further differentiate into glucose-responsive islet-like cells following macroencapsulation and in vivo implantation. The HiPECs can protect mice from streptozotocin-induced hyperglycemia and maintain normal glucose homeostasis and equilibrated plasma glucose concentrations at levels similar to the human set point. These results further validate the potential use of hiPSC-derived islet cells for application in clinical settings., Highlights • hiPSCs can be efficiently differentiated to pancreatic endoderm in a large-scale setup • HiPECs can further differentiate into glucose-responsive β cells in vivo • HiPEC-derived β cells can protect mice from STZ-induced hyperglycemia, In this article, Kraus and colleagues show that human induced pluripotent stem cells can robustly and efficiently be differentiated to pancreatic endoderm in a large-scale setup. Moreover, after macroencapsulation and further in vivo maturation, hiPSC-derived pancreatic endoderm cells can give rise to glucose-responsive β cells, which protect mice from STZ-induced hyperglycemia.