A method of culturing human pluripotent stem cells to produce pancreatic lineage, the method comprising the steps of (a) culturing the stem cells in the presence of a chemically defined medium comprising an effective amount of FGF, Activin A, and BMP; (b) culturing the cells from step (a) in the presence of a chemically defined medium comprising an effective amount of insulin, transferrin, and selenium (ITS), and FGF; (c) culturing the cells from step (b) in the presence of a chemically defined medium comprising an effective amount of insulin, transferrin, and selenium (ITS), and Noggin-Nicotinamide-Retinoic acid; and (d) culturing the cells from step (c) in the presence of a serum free chemically defined medium (ITSFINE and Noggin) comprising an effective amount of ITS, FGF7, islet neogenesis associated peptide (INGAP), nicotinamide, and Exendin-4, wherein pancreatic lineage cells are produced, wherein the pancreatic lineage cells are insulin+ cells.