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Stem cell-based replacement therapies hold the promise to restore function of damaged or degenerated tissue such as the pancreatic islets in people with type 1 diabetes. Wide application of these therapies requires overcoming the fundamental roadblock of immune rejection. To address this issue, we use genetic engineering to create human pluripotent stem cells (hPSCs) in which the majority of the polymorphic human leukocyte antigens (HLAs), the main drivers of allogeneic rejection, are deleted. We retain the common HLA class I allele HLA-A2 and less polymorphic HLA-E/F/G to allow immune surveillance and inhibition of natural killer (NK) cells. We employ a combination of in vitro assays and humanized mouse models to demonstrate that these gene manipulations significantly reduce NK cell activity and T-cell-mediated alloimmune response against hPSC-derived islet cells. In summary, our approach produces hypoimmunogenic hPSCs that can be readily matched with recipients to avoid alloimmune rejection. [Display omitted] • Deletion of individual HLA genes protects β cells from T-cell-mediated rejection • Genome editing of stem cells does not affect their β cell differentiation potential • Retention of HLA-A2 promotes surface expression of HLA-E and reduces NK cell activity • HLA-A2 retention reduces rejection while allowing immune surveillance of the graft Parent et al. create immune-evasive human pluripotent stem cells by individually deleting all classical human leukocyte antigens except for the highly prevalent allele HLA-A2. This strategy significantly reduces NK- and T-cell-mediated rejection of stem cell-derived pancreatic β cells while retaining immune surveillance of the cells through HLA-A2. [ABSTRACT FROM AUTHOR]