The last 5 years have witnessed an explosion in the use of genes and cells as biomedicines. While primarily aimed at cancer, gene engineering and cell therapy strategies have additionally been used for Mendelian, neurodegenerative and metabolic disorders. The main focus of gene and cell therapy strategies in metabolism has been diabetes mellitus. This disease is a disorder of glucose homeostasis, either due to the immune-mediated eradication of pancreatic beta cells in the islets of Langerhans (type 1 diabetes) or resulting from insulin resistance and obesity syndromes where the insulin-producing capability of the beta cell is ultimately exhausted in the face of insensitivity to the effects of insulin in the peripheral glucose-utilising tissues (type 2 diabetes). A significant number of animal studies have demonstrated the potential in restoring normoglycaemia by islet transplantation in the context of immunoregulation achieved by gene transfer of immunoregulatory genes to allo- and xenogeneic islets ex vivo. Additionally, gene and cell therapy has also been used to induce tolerance to auto- and alloantigens and to generate the tolerant state in autoimmune rodent animal models of type 1 diabetes or rodent recipients of allogeneic/xenogeneic islet transplants. The achievements of gene and cell therapy in type 2 diabetes are less evident, but seminal studies promise that this modality can be relevant to treat and perhaps prevent the underlying causes of the disease. Here we present an overview of the current status of gene and cell therapy for type 1 and 2 diabetes and we propose potential therapeutic options that could be clinically useful. For type 1 diabetes, transplantation of islets engineered to evade or suppress the recipient immune response is the most readily-available technology today. A number of gene delivery vectors encoding proteins that impair a variety of immune cells have already been examined and proven versatile. More challenging but, nonetheless, just over the horizon are attempts to promote tolerance to islet allografts. Type 2 diabetes will likely require a better understanding of the processes that determine insulin sensitivity in the periphery. Targeting tissues such as muscle and fat with vectors encoding genes whose products promote insulin sensitivity and glucose uptake is an approach that does not carry with it the side-effects often associated with pharmacologic agents currently in use. In the end, progress in vector design, elucidation of antigen-specific immunity and insulin sensitivity will provide the framework for gene drug use in the treatment of type 1 and type 2 diabetes.