Macroencapsulated pancreatic endoderm cells (PECs) can reverse diabetes in rodents and preclinical studies revealed that thyroid hormones in vitro and in vivo bias PECs to differentiate into insulin-producing cells. In an ongoing clinical trial, PECs implanted in macroencapsulation devices into patients with type 1 diabetes were safe but yielded heterogeneous outcomes. Though most patients developed meal responsive C-peptide, levels were heterogeneous and explanted grafts had variable numbers of surviving cells with variable distribution of endocrine cells. We measured circulating triiodothyronine and thyroxine levels in all patients treated at 1 of the 7 sites of the ongoing clinical trial and determined if thyroid hormone levels were associated with the C-peptide or glucagon levels and cell fate of implanted PECs. Both triiodothyronine and thyroxine levels were significantly associated with the proportion of cells that adopted an insulin-producing fate with a mature phenotype. Thyroid hormone levels were inversely correlated to circulating glucagon levels after implantation, suggesting that thyroid hormones lead PECs to favor an insulin-producing fate over a glucagon-producing fate. In mice, hyperthyroidism led to more rapid maturation of PECs into insulin-producing cells similar in phenotype to PECs in euthyroid mice. These data highlight the relevance of thyroid hormones in the context of PEC therapy in patients with type 1 diabetes and suggest that a thyroid hormone adjuvant therapy may optimize cell outcomes in some PEC recipients.