In the present study, we examined the therapeutic potential of human amnion-derived insulin-secreting cells for type 1 diabetes. Human amniotic mesenchymal stem cells (hAMs) were isolated from amnion and cultivated to differentiate into insulin-secreting cells in vitro. After culture in vitro, the differentiated cells (hAM-ISCs) were intensively stained with dithizone and secreted insulin and c-peptide in a high-glucose-dependent manner. They expressed mRNAs of pancreatic cell-related genes, including INS, PDX1, Nkx6-1, NEUROG3, ISL1, NEUROD1, GLUT1, GLUT2, PC1/3, PC2, GCK, PPY, SST, and GC, and were positive for human insulin and c-peptide. Transplantation of hAM-ISCs into the kidneys of mice with streptozotocin-induced diabetes restored body weight and normalized the blood glucose levels, which lasted for 210 days. Only human insulin and c-peptide were detected in the blood of normalized mice after 2 months of transplantation, but little mouse insulin and c-peptide. Removal of graft-bearing kidneys from these mice resulted in causing hyperglycemia again. Human cell-specific gene, hAlu, and human pancreatic cell-specific genes, insulin, PDX1, GLUT1, GLP1R, Nkx6-1, NEUROD1, and NEUROG3, were detected in the graft-bearing kidneys. Colocalization of human insulin and human nuclei antigen was also observed. These results demonstrate that hAMs could differentiate into functional insulin-secreting cells in vitro, and human insulin secreted from hAM-ISCs following transplantation into type 1 diabetic mice could normalize hyperglycemia, overcoming immune rejection for a long period.