Though too early to call it a cure, the procedure has enabled the young people, who have Type I diabetes, to live insulin-free so far, some for as long as three years. The treatment involves stem cell transplants from the patients' own blood.
"It's the first time in the history of Type 1 diabetes where people have gone with no treatment whatsoever ... no medications at all, with normal blood sugars," said study co-author Dr. Richard Burt of Northwestern University's medical school in Chicago.
While the procedure can be potentially life-threatening, none of the 15 patients in the study died or suffered lasting side effects. But it didn't work for two of them.
For now, the new treatment does not apply to the nearly 20 million Americans with Type 2 diabetes, reports CBS News medical correspondent Dr. Jon LaPook. But diabetics are hopeful they'll some day be free of a lifetime of pinpricks and injections.
Larger, more rigorous studies are needed to determine if stem cell transplants could become standard treatment for people with the disease once called juvenile diabetes. It is less common than Type 2 diabetes, which is associated with obesity.
The hazards of stem cell transplantation also raise questions about whether the study should have included children. One patient was as young as 14.
Dr. Lainie Ross, a medical ethicist at the University of Chicago, said the researchers should have studied adults first before exposing young teens to the potential harms of stem cell transplant, which include infertility and late-onset cancers.
In addition, Ross said that the study should have had a comparison group to make sure the treatment was indeed better than standard diabetes care.
Burt, who wrote the study protocol, said the research was done in Brazil because U.S. doctors were not interested in the approach. The study was approved by ethics committees in Brazil, he said, adding that he personally believes it was appropriate to do the research in children as well as adults, as long as the Brazilian ethics panels approved.
Burt and other diabetes experts called the results an important step forward.
"It's the threshold of a very promising time for the field," said Dr. Jay Skyler of the Diabetes Research Institute at the University of Miami.
Skyler wrote an editorial in the Journal of the American Medical Association, which published the study, saying the results are likely to stimulate research that may lead to methods of preventing or reversing Type I diabetes.
"These are exciting results. They look impressive," said Dr. Gordon Weir of Joslin Diabetes Center in Boston.