The generation of functional β-cells from human pluripotent stem cells (hPSCs) for cell replacement therapy and disease modeling of diabetes is being investigated by many groups. We have developed a protocol to harvest and aggregate hPSC-derived pancreatic progenitors generated using a commercially available kit into near uniform spheroids and to further differentiate the cells toward an endocrine cell fate in suspension culture. Using a static suspension culture platform, we could generate a high percentage of insulin-expressing, glucose-responsive cells. We identified FGF7 as a soluble factor promoting aggregate survival with no inhibitory effect on endocrine gene expression. Notch inhibition of pancreatic progenitor cells during aggregation improved endocrine cell induction in vitro and improved graft function following implantation and further differentiation in mice. Thus we provide an approach to promote endocrine formation from kit-derived pancreatic progenitors, either through extended culture or post implant.