Recent reports have suggested that mesenchymal cells derived from bone marrow may differentiate into not only mesenchymal lineage cells but also other lineage cells. There is possibility for insulin-producing cells (IPCs) to be differentiated from mesenchymal cells. We used self-functional repair stimuli of stem cells by partial injury. Rat pancreatic extract (RPE) from the regenerating pancreas (2 days after 60% pancreatectomy) was treated to rat mesenchymal cells. After the treatment of RPE, they made clusters like islet of Langerhans within a week and expressed four pancreatic endocrine hormones; insulin, glucagon, pancreatic polypeptide, and somatostatin. Moreover, IPCs released insulin in response to normal glucose challenge. Here we demonstrate that the treatment of RPE can differentiate rat mesenchymal cells into IPCs which can be a potential source for the therapy of diabetes. (c) 2005 Elsevier Inc. All rights reserved.