The generation of pancreatic cell types from renewable cell sources holds promise for cell replacement therapies for diabetes. Although most effort has focused on generating pancreatic beta cells, considerable evidence indicates that glucagon secreting alpha cells are critically involved in disease progression and proper glucose control. Here we report on the generation of stem cell-derived human pancreatic alpha (SC-alpha) cells from pluripotent stem cells via a transient pre-alpha cell intermediate. These pre-alpha cells exhibit a transcriptional profile similar to mature alpha cells and although they produce proinsulin protein, they do not secrete significant amounts of processed insulin. Compound screening identified a protein kinase c activator that promotes maturation of pre-alpha cells into SC-alpha cells. The resulting SC-alpha cells do not express insulin, share an ultrastructure similar to cadaveric alpha cells, express and secrete glucagon in response to glucose and some glucagon secretagogues, and elevate blood glucose upon transplantation in mice.