The pancreas plays a major role in nutritional homeostasis through synthesis and secretion of hormones and enzymes. This organ includes endocrine and exocrine cell types, all deriving from a common set of epithelial cells that originate in the early gut endoderm. The exocrine pancreas develops to form acinar cells and a highly branched ductal epithelium, while endocrine cells aggregate into islets of Langerhans. The latter are specialized micro-organs composed of four different cell type alpha-, beta-, delta-, and PP-cells, which produce the hormones glucagon, insulin, somatostatin, and PP (pancreatic polypeptide), respectively. Insulin and glucagon function coordinately to control glucose homeostasis, whereas somatostatin and PP regulate the secretion of other hormones and of exocrine enzymes (for review, see Collombat et al., 2006). Understanding how beta-cells are generated during development, but also throughout adulthood, is a prerequisite to the design of regenerative and cellular therapies for type 1 and type 2 diabetes, both diseases being ultimately characterized by loss and/or insufficient numbers of beta-cells. The analysis of mutant mice uncovered the crucial role exerted by a battery of transcription factors acting in the cell fate determination and cell subtype specification of the endocrine pancreas (for review, see Collombat et al., 2006). Thus, the bHLH factor Ngn3 is required to endow pancreatic endoderm with an endocrine cell fate. The allocation of endocrine progenitors to the different islet cell subtypes is under the control of mainly two transcription factors, Pax4 and Arx. Through reciprocal inhibitory interactions, these two factors direct the genesis of beta-, delta-cells, and alpha-, PP-cells, respectively. Specifically, the predominance of Pax4 promotes the formation of beta- and delta-cells, whereas Arx favors the alpha- and PP-cell fates (Sosa-Pineda et al., 1997; Collombat et al., 2003; 2005, 2007). Recently, the conditional misexpression of a single transcription factor, Arx, in mature beta-cells was found to induce their conversion into alpha- and PP-cells (Collombat et al., 2007). This prompted us to ask whether beta-cells could be generated by conditionally misexpressing the Arx antagonist, Pax4, in adult alpha-cells. In such transgenic mice, glucagon-producing cells are found converted into beta-cells. Moreover, the resulting glucagon deficiency induces the formation of new alpha-cells that in turn are transdifferentiated into beta-cells. These beta-cells are functional as they can reverse streptozotocine-induced diabetes. Interestingly, the alpha-cell neogenesis is Ngn3-dependent and it appears that the duct-lining cells may represent the source of such endocrine progenitors under these experimental conditions (Collombat et al., 2008, in revision for Cell). These findings corroborate a recent study using partial pancreatic duct ligation (PDL), where the duct epithelium was implicated in Ngn3-mediated endocrine cell neogenesis (Xu et al., 2008).