Diabetes is a growing disease worldwide and has emerged as a major healthcare problem in India. Insulin is an essential medicine for the treatment of diabetes. Large dairy animals, such as buffaloes and cows, may be used as bioreactors for cost-effective production of human insulin. The present study was aimed to produce transgenic buffalo embryos containing the human insulin gene through hand-guided cloning for production of transgenic animals. Buffalo female fetal fibroblast cells at passage number 3 were transfected using mammary gland- specific expression vector containing the human insulin gene under buffalo β-lactoglobulin promoter by nucleofection method and cultured with G418 drug for 3 weeks to obtain positive transgenic cell clones. Transgene integration into buffalo female fetal fibroblast genome was confirmed by PCR and Southern blotting. Nontransfected and transgene integrated cells were used as nuclear donors to produce embryos by the hand-guided cloning technique. The developmental competence and quality of embryos as judged by total cell number and TUNEL assay were compared among transgenic and nontransgenic (control) embryos. The blastocyst rate was lower (P < 0.05) for transgenic embryos than that of nontransgenic cloned embryos (35.97 ± 2.16 v. 45.80 ± 4.11, respectively). The apoptotic index was found to be lower (P < 0.05) for control blastocysts than that for transgenic blastocysts. However, the total cell number was similar (P < 0.05) among transgenic and control cloned blastocysts. Thus, transgenic cells, and subsequently transgenic embryos containing the human insulin gene, were successfully produced and transferred in recipients. In the future, these may be used for production of transgenic buffalo expressing human insulin in its milk and thus can be further utilised in large-scale production of human insulin.