OBJECTIVE Worldwide, diabetes mellitus (DM) is an ever-increasing metabolic disorder. A promising approach to the treatment of DM is the implantation of insulin producing cells (IPC) that have been derived from various stem cells. Culture conditions play a pivotal role in the quality and quantity of the differentiated cells. In this experimental study, we have applied various culture conditions to differentiate human umbilical cord matrix-derived mesenchymal cells (hUCMs) into IPCs and measured insulin production. MATERIALS AND METHODS In this experimental study, we exposed hUCMs cells to pancreatic medium and differentiated them into IPCs in monolayer and suspension cultures. Pancreatic medium consisted of serum-free Dulbecco's modified eagle's medium Nutrient mixture F12 (DMEM/F12) medium with 17.5 mM glucose supplemented by 10 mM nicotinamide, 10 nM exendin-4, 10 nM pentagastrin, 100 pM hepatocyte growth factor, and B-27 serum-free supplement. After differentiation, insulin content was analyzed by gene expression, immunocytochemistry (IHC) and the chemiluminesence immunoassay (CLIA). RESULTS Reverse transcription-polymerase chain reaction (RT-PCR) showed efficient expressions of NKX2.2, PDX1 and INSULIN genes in both groups. IHC analysis showed higher expression of insulin protein in the hanging drop group, and CLIA revealed a significant higher insulin production in hanging drops compared with the monolayer group following the glucose challenge test. CONCLUSION We showed by this novel, simple technique that the suspension culture played an important role in differentiation of hUCMs into IPC. This culture was more efficient than the conventional culture method commonly used in IPC differentiation and cultivation.