Pursuit of a closed-loop artificial pancreas that automatically controls the blood glucose of individuals with type 1 diabetes has intensified during the past six years. Here we discuss the recent progress and challenges in the major steps towards a closed-loop system. Continuous insulin infusion pumps have been widely available for over two decades, but “smart pump” technology has made the devices easier to use and more powerful. Continuous glucose monitoring (CGM) technology has improved and the devices are more widely available. A number of approaches are currently under study for fully closed-loop systems; most manipulate only insulin, while others manipulate insulin and glucagon. Algorithms include on-off (for prevention of overnight hypoglycemia), proportional-integral-derivative (PID), model predictive control (MPC) and fuzzy logic based learning control. Meals cause a major “disturbance” to blood glucose, and we discuss techniques that our group has developed to predict when a meal is likely to be consumed and its effect. We further examine both physiology and device-related challenges, including insulin infusion set failure and sensor signal attenuation. Finally, we discuss the next steps required to make a closed-loop artificial pancreas a commercial reality.