Type 1 Diabetes Mellitus (T1DM) is an autoimmune disease that leads to the destruction of pancreatic β cells, impeding insulin production and significantly increasing the risk of metabolic complications. Traditional treatments, including insulin therapy and glucose monitoring technologies, offer limited long-term effectiveness and come with high costs. Insulin therapy often requires continuous adjustments, and despite the availability of continuous glucose monitoring (CGM) devices and insulin pumps, these solutions do not fully restore normal pancreatic function. This leaves patients vulnerable to complications such as diabetic ketoacidosis, nephropathy, retinopathy, and cardiovascular disease. Consequently, the use of induced pluripotent stem cell (iPSC)-based therapies presents an innovative approach to regenerate pancreatic β cells and address the challenges of T1DM treatment. iPSCs, derived from somatic cells, hold immense promise due to their pluripotency, allowing them to differentiate into any cell type, including insulin-producing β cells. This study employed an analytical approach using the following keywords: (((diabetes type 1) AND (transcription factor)) AND (gene polymorphism)) AND (drug delivery)) AND (Induced pluripotent stem cells). Recent advances have highlighted improvements in signaling pathways for endoderm formation, pancreas specification, endocrine specification, and β cell maturation, which are critical for generating functional insulin-producing cells. These advances, when integrated with scaffold technologies, offer enhanced cell survival and functionality. Specifically, subcutaneous scaffolds combined with oxygenation demonstrated improved β cell viability by 50% and increased β cell maturation by 60%, providing a promising avenue for effective insulin production and diabetes management. In comparison, microporous scaffolds, utilized in intraportal and intrahepatic delivery methods, showed a 70% improvement in insulin production and glucose regulation efficiency, ensuring better integration with the body’s blood supply. This highlights the importance of scaffold design in optimizing cell function post-transplantation. Furthermore, modulation of immune responses through regulation of PD-L1 expression and miRNA (miR-155) resulted in a 30% increase in immune tolerance towards transplanted cells, which significantly reduces the risk of immune rejection, a common challenge in cell-based therapies. However, despite these promising results, several challenges remain unresolved, particularly concerning the efficiency of β cell differentiation, immune rejection, and potential risks of immunogenicity. iPSC-based therapies combined with scaffolds and immune modulation have shown substantial potential for treating T1DM, but further research is required to overcome the issues of efficient differentiation and ensure long-term stability and safety of the transplanted cells. Studies indicate that around 80% of iPSC-derived β cells have successfully matured and exhibited insulin secretion in response to glucose, but improvements in differentiation protocols are still needed to ensure that these cells are both functionally adequate and sustainable for long-term clinical use. The integration of signaling pathways, advanced drug delivery methods, and genetic polymorphisms will play a crucial role in enhancing the efficacy of iPSC-derived pancreatic β cells, offering a promising future therapeutic solution for T1DM. However, extensive clinical trials must be conducted to address concerns related to the safety, stability, and immune response to these therapies, to ensure their feasibility and effectiveness in a clinical setting