The contribution of stem cells derived from adult tissues to the recovery of pancreatic islets from chemical injury is controversial. Analysis of nonhematopoietic differentiation of bone marrow-derived cells has yielded positive and negative results under different experimental conditions. Using the smallest subset of bone marrow cells lacking immuno-hematopoietic lineage markers, we have detected incorporation and conversion into insulin-producing cells. Donor cells identified by genomic markers silence green fluorescent protein (GFP) expression as a feature of differentiation, in parallel to expressing PDX-1 and proinsulin. Here we elaborate potential experimental difficulties that might result in false-negative results. The use of GFP as a reporter protein is suboptimal for differentiation experiments: (a) the bone marrow of GFP donors partially expresses the reporter protein, (b) differentiating bone marrow cells silence GFP expression, and (c) the endocrine pancreas is constitutively negative for GFP. In addition, design of the experiments, data analysis, and interpretation encounter numerous objective and subjective difficulties. Rigorous evaluation under optimized experimental conditions confirms the capacity of adult bone marrow-derived stem cells to adopt endocrine developmental traits, and demonstrates that GFP downregulation and silencing is a feature of differentiation.