PDX-1 plays a central role in differentiation of insulin-producing cells. We previously reported that exogenous PDX-1 protein can permeate cells and induce insulin gene expression in progenitor cells. These data suggest a strategy for facilitating differentiation into insulin-producing cells. Here we show the mechanism of PDX-1 protein transduction. Initially, a punctate cytoplasmic distribution of PDX-1 protein transduction domain (PTD), which co-localized with an endosomal marker, was observed in treated cells. However, homogeneous distribution of PDX-1-PTD was observed in some cells, indicating that PDX-1 is transduced by endocytosis and then released. The experiments using inhibitors suggested that the PDX-1 is transported through the Golgi complex and to the endoplasmic reticulum. Moreover, we observed in real-time PDX-1-PTD release from endosomes. These data suggest that mechanism of transduction of PDX-1 protein is by endocytosis and subsequent release from the endosome homogeneously in cytoplasm and nuclei, and that PDX-1 protein transduction could be a valuable strategy for facilitating differentiation of progenitor cells into insulin-producing cells.