Transplantation of pancreatic islet cells derived from human pluripotent stem cells is a promising treatment for diabetes. Despite progress in the generation of stem-cell-derived islets (SC-islets), no detailed characterization of their functional properties has been conducted. Here, we generated functionally mature SC-islets using an optimized protocol and benchmarked them comprehensively against primary adult islets. Biphasic glucose-stimulated insulin secretion developed during in vitro maturation, associated with cytoarchitectural reorganization and the increasing presence of alpha cells. Electrophysiology, signaling and exocytosis of SC-islets were similar to those of adult islets. Glucose-responsive insulin secretion was achieved despite differences in glycolytic and mitochondrial glucose metabolism. Single-cell transcriptomics of SC-islets in vitro and throughout 6 months of engraftment in mice revealed a continuous maturation trajectory culminating in a transcriptional landscape closely resembling that of primary islets. Our thorough evaluation of SC-islet maturation highlights their advanced degree of functionality and supports their use in further efforts to understand and combat diabetes.