A human pancreatic b-cell line that is functionally equivalent to primary b-cells has not been available. We established a reversibly immortalized human b-cell clone ( NAKT-15) by transfection of primary human b-cells with a retroviral vector containing simian virus 40 large T-antigen (SV40T) and human telomerase reverse transcriptase ( hTERT) cDNAs flanked by paired loxP recombination targets, which allow deletion of SV40T and TERT by Cre recombinase. Reverted NAKT-15 cells expressed b-cell transcription factors ( Isl-1, Pax 6, Nkx 6.1, Pdx-1), prohormone convertases 1/3 and 2, and secretory granule proteins, and secreted insulin in response to glucose, similar to normal human islets. Transplantation of NAKT-15 cells into streptozotocin-induced diabetic severe combined immunodeficiency mice resulted in perfect control of blood glucose within 2 weeks; mice remained normoglycemic for longer than 30 weeks. The establishment of this cell line is one step toward a potential cure of diabetes by transplantation.