Transplantation of pancreatic islet cells derived from human pluripotent stem cells is a promising treatment for diabetes. Despite progress in stem cell-derived islet (SC-islet) generation, detailed characterization of their functional properties has not been conducted. Here, we generated functionally mature SC-islets using an optimized protocol and comprehensively benchmarked them against primary adult islets. Biphasic glucose stimulated insulin secretion developed during in vitro maturation, associated with cytoarchitectural reorganization and increased alpha cells. Electrophysiology and exocytosis of SC-islets were comparable to 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 murine engraftment 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.