Background Human embryonic stem cells represent a potentially unlimited source of insulin-producing cells for diabetes therapy. While tremendous progress has been made in directed differentiation of human embryonic stem cells into IPCs in vitro, the mechanisms controlling its differentiation and function are not fully understood. Previous studies revealed that lysine-specific demethylase 1(LSD1) balanced the self-renewal and differentiation in human induced pluripotent stem cells and human embryonic stem cells. This study aims to explore the role of LSD1 in directed differentiation of human embryonic stem cells into insulin-producing cells. Methods Human embryonic stem cell line H9 was induced into insulin-producing cells by a four-step differentiation protocol. Lentivirus transfection was applied to knockdown LSD1 expression. Immunofluorescence assay and flow cytometry were utilized to check differentiation efficiency. Western blot was used to examine signaling pathway proteins and differentiation-associated proteins. Insulin/C-peptide release was assayed by ELISA. Statistical analysis between groups was carried out with one-way ANOVA tests or a student's t test when appropriate. Results Inhibition or silencing LSD1 promotes the specification of pancreatic progenitors and finally the commitment of functional insulin-producing beta cells; Moreover, inhibition or silencing LSD1 activated ERK signaling and upregulated pancreatic progenitor associated genes, accelerating pre-maturation of pancreatic progenitors, and conferred the NKX6.1(+) population with better proliferation ability. IPCs with LSD1 inhibitor tranylcypromine treatment displayed enhanced insulin secretion in response to glucose stimulation. Conclusions We identify a novel role of LSD1 inhibition in promoting IPCs differentiation from hESCs, which would be emerged as potential intervention for generation of functional pancreatic beta cells to cure diabetes.