Differentiation of insulin-producing pancreatic β cells from induced pluripotent stem cells (iPSCs) derived from patients with diabetes promises to provide autologous cells for diabetes cell replacement therapy. However, current approaches produce patient iPSC-derived β (SC-β) cells with poor function in vitro and in vivo. Here, we used CRISPR-Cas9 to correct a diabetes-causing pathogenic variant in Wolfram syndrome 1 (WFS1) in iPSCs derived from a patient with Wolfram syndrome (WS). After differentiation to β cells with our recent six-stage differentiation strategy, corrected WS SC-β cells performed robust dynamic insulin secretion in vitro in response to glucose and reversed preexisting streptozocin-induced diabetes after transplantation into mice. Single-cell transcriptomics showed that corrected SC-β cells displayed increased insulin and decreased expression of genes associated with endoplasmic reticulum stress. CRISPR-Cas9 correction of a diabetes-inducing gene variant thus allows for robust differentiation of autologous SC-β cells that can reverse severe diabetes in an animal model.