Permanent neonatal diabetes mellitus (PNDM) can be caused by insulin mutations. We generated induced pluripotent stem cells from fibroblasts of a patient with PNDM and undetectable insulin at birth due to a homozygous mutation in the translation start site of the insulin gene. Differentiation of mutant cells resulted in insulin-negative endocrine stem cells expressing MAFA, NKX6.1, and chromogranin A. Correction of the mutation in stem cells and differentiation to pancreatic endocrine cells restored insulin production and insulin secretion to levels comparable to those of wild-type cells. Grafting of corrected cells into mice, followed by ablating mouse β cells using streptozotocin, resulted in normal glucose homeostasis, including at night, and the stem cell-derived grafts adapted insulin secretion to metabolic changes. Our study provides proof of principle for the generation of genetically corrected cells autologous to a patient with non-autoimmune insulin-dependent diabetes. These cases should be readily amenable to autologous cell therapy. •Neonatal diabetes due to homozygous mutation in the start codon of the insulin gene•iPSCs with INSATG>ATA mutation give rise to hormone-negative endocrine cells•Gene correction restores insulin production•Insulin-producing cells protect mice from diabetes Stem cells from a subject with diabetes due to a mutation in the insulin locus can be corrected and insulin secretion restored. Grafted cells protect a mouse model from diabetes. This is a proof of principle for cell replacement for an insulin-dependent form of diabetes. Due to absence of autoimmunity such cases may be suitable for autologous cell therapy.