Type 1 diabetes (T1D) is a chronic, lifelong metabolic disease. It is characterised by the autoimmune-mediated loss of insulin-producing pancreatic β cells in the islets of Langerhans (β-islets), resulting in disrupted glucose homeostasis. Administration of exogenous insulin is the most common management method for T1D, but this requires lifelong reliance on insulin injections and invasive blood glucose monitoring. Replacement therapies with beta cells are being developed as an advanced curative treatment for T1D. Unfortunately, this approach is limited by the lack of donated pancreatic tissue, the difficulties in beta cell isolation and viability maintenance, the longevity of the transplanted cells in vivo, and consequently high costs. Emerging approaches to address these limitations are under intensive investigations, including the production of insulin-producing beta cells from various stem cells, and the development of bioengineered devices including nanotechnologies for improving islet transplantation efficacy without the need for recipients taking toxic anti-rejection drugs. These emerging approaches present promising prospects, while the challenges with the new techniques need to be tackled for ultimately clinical treatment of T1D. This review discussed the benefits and limitations of the cell-based therapies for beta cell replacement as potential curative treatment for T1D, and the applications of bioengineered devices including nanotechnology to overcome the challenges associated with beta cell transplantation.