Type 1 diabetes mellitus (T1DM) is an organ-specific autoimmune disease caused by irreversible damage to pancreatic β cells. No effective cure for T1DM has been established. Daily injection of exogenous insulin is the primary way to maintain quality of life in patients with T1DM. Although islet transplantation is an effective therapy for T1DM, it is limited by the severe shortage of donors and permanent immunosuppression. The replacement of pancreatic β cells by stem cells is an innovative biomedical therapy that aims to restore the function of the islets and replace exogenous insulin in patients with T1DM. This review summarizes the progress in the research of stem cell-differentiated pancreatic β cell treatment in recent years and provides references for the clinical application of stem cell therapy in the treatment of T1DM.