Type 1 diabetes (T1D) is characterized by autoimmune-mediated destruction of pancreatic β-cells, resulting in lifelong insulin dependence and disease burden. Stem cell–derived islet (SCI) replacement therapies have emerged as a promising strategy to restore endogenous insulin production; however, immune rejection, inflammatory stress, and intrinsic β-cell vulnerability remain major barriers to durable graft survival. Recent advances in gene editing and stem cell engineering have accelerated the development of next-generation SCIs designed to evade immune recognition while enhancing resistance to diabetogenic stress pathways. In this review, we examine genetic engineering strategies aimed at improving β-cell protection through modulation of antigen presentation, immune checkpoint signaling, cytokine responsiveness, and cellular stress adaptation. We discuss established immune-evasive targets including beta-2-microglobulin (B2M), class II major histocompatibility complex transactivator (CIITA), cluster of differentiation 47 (CD47), programmed death-ligand 1 (PD-L1), and cytotoxic T-lymphocyte-associated protein 4-immunoglobulin (CTLA4-Ig), alongside emerging stress-resilience pathways involving renalase (RNLS), thioredoxin-interacting protein (TXNIP), and unfolded protein response regulators. We further highlight how β-cell stress can amplify immune recognition and graft dysfunction. Collectively, these approaches support multifunctional engineered SCIs designed to overcome immune-mediated and intrinsic stress-related barriers to durable β-cell replacement. Literature was identified through PubMed and Google Scholar searches conducted from February through September 2026.
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