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Abstract In vitro differentiation of human induced pluripotent stem cells (iPSCs) into functional islets holds immense potential to create an unlimited source of islets for diabetes research and treatment. A continuous challenge in this field is to generate glucose-responsive mature islets. We herein report a previously undiscovered angiopoietin signal for in vitro islet development. We revealed, for the first time, that angiopoietins, including angiopoietin-1 (Ang1) and angiopoietin-2 (Ang2) permit the generation of islets from iPSCs with elevated glucose responsiveness, a hallmark of mature islets. Angiopoietin-stimulated islets exhibited glucose synchronized calcium ion influx in repetitive glucose challenges. Moreover, Ang2 augmented the expression of all islet hormones, including insulin, glucagon, somatostatin, and pancreatic polypeptide; and β cell transcription factors, including NKX6.1, MAFA, UCN3, and PDX1. Furthermore, we showed that the Ang2 stimulated islets were able to regulate insulin exocytosis through actin-filament polymerization and depolymerization upon glucose challenge, presumably through the CDC42-RAC1-gelsolin mediated insulin secretion signaling pathway. We also discovered the formation of endothelium within the islets under Ang2 stimulation. These results strongly suggest that angiopoietin acts as a signaling molecule to endorse in vitro islet development from iPSCs.