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Type 1 Diabetes (T1D) is a devastating disease in which the immune system attacks insulin- producing beta cells in the pancreas, disrupting the normal blood glucose regulation mechanism and resulting in the significant burden of ongoing blood glucose monitoring and management and longer-term damage to organs and tissues. An emerging therapy for T1D includes transplanting insulin-producing stem cell (SC)-derived aggregates into patients, restoring normal regulation of blood glucose and eliminating the need for insulin injections. To enable stable storage, distribution, and clinical administration of this therapeutic, reliable cryopreservation methods are required. However, current cryopreservation protocols result in low cell viability post thaw and have challenges in scalability. This review provides background on stem cell therapy for T1D and the production and storage pipeline of these SC-derived aggregates, with a focus on the challenges of cryopreservation. We review the fundamental physics involved in cryopreservation, including cryoprotective agents (CPAs), CPA loading and unloading, the importance of cooling and rewarming rate selection, and why the cell aggregate microstructure of islets presents a particularly difficult challenge for cryopreservation. Finally, we highlight important developments in SC-derived aggregate cryopreservation and the state of the art.