Cellular models and culture conditions for in vitro expansion of insulin-producing cells represent a key element to develop cell therapy for diabetes. Initial evidence that human beta-cells could be expanded after undergoing a reversible epithelial-mesenchymal transition has been recently negated by genetic lineage tracing studies in mice. Here, we report that culturing human pancreatic islets in the presence of serum resulted in the emergence of a population of nestin-positive cells. These proliferating cells were mainly C-peptide negative, although in the first week in culture, proliferating cells, insulin promoter factor-1 (Ipf-1) positive, were observed. Later passages of islet-derived cells were Ipf-1 negative and displayed a mesenchymal phenotype. These human pancreatic islet-derived mesenchymal (hPIDM) cells were expanded up to 10(14) cells and were able to differentiate toward adipocytes, osteocytes and chondrocytes, similarly to mesenchymal stem/precursor cells. Interestingly, however, under serum-free conditions, hPIDM cells lost the mesenchymal phenotype, formed islet-like clusters (ILCs) and were able to produce and secrete insulin. These data suggest that, although these cells are likely to result from preexisting mesenchymal cells rather than beta-cells, hPIDM cells represent a valuable model for further developments toward future replacement therapy in diabetes.