Human induced pluripotent stem (hiPS) cells have potential uses for drug discovery and cell therapy, including generation of pancreatic β-cells for diabetes research and treatment. In this study, we developed a simple protocol for generating insulin-producing cells from hiPS cells. Treatment with activin A and a GSK3β inhibitor enhanced efficient endodermal differentiation, and then combined treatment with retinoic acid, a bone morphogenic protein inhibitor, and a transforming growth factor-β (TGF-β) inhibitor induced efficient differentiation of pancreatic progenitor cells from definitive endoderm. Expression of the pancreatic progenitor markers PDX1 and NGN3 was significantly increased at this step and most cells were positive for anti-PDX1 antibody. Moreover, several compounds, including forskolin, dexamethasone, and a TGF-β inhibitor, were found to induce the differentiation of insulin-producing cells from pancreatic progenitor cells. By combined treatment with these compounds, more than 10% of the cells became insulin positive. The differentiated cells secreted human c-peptide in response to various insulin secretagogues. In addition, all five hiPS cell lines that we examined showed efficient differentiation into insulin-producing cells with this protocol.