The supply of islet cells is a limiting factor for the widespread application of islet transplantation of type-1 diabetes. Islets constitute 1% to 2% of pancreatic tissue, leaving approximately 98% as discard after islet isolation and purification. In this report we present our data on the isolation of multipotent progenitor cells from discarded adult human pancreatic tissue. The collected cells from discarded nonislet fractions, after enzymatic digestion and gradient purification of islets, were dissociated for suspension culture in a serum-free medium. The cell clusters grown to a size of 100 to 150 mum contained cells staining for stage-specific embryonic antigens, but not insulin or C-peptide. To direct cell differentiation toward islets, clusters were recultured in a pancreatic differentiation medium. Insulin and C-peptide-positive cells by immunocytochemistry appeared within a week, reaching over 10% of the cell population. Glucagon and somatostatin-positive cells were also detected. The cell clusters were found to secrete insulin in response to glucose stimulation. Cells from the same clusters also had the capacity for differentiation into neural cells, as documented by staining for neural and glial cell markers when cultured as monolayers in media containing neurotrophic factors. These data suggest that multipotent pancreatic progenitor cells exist within the human pancreatic tissue that is typically discarded during islet isolation procedures. These adult progenitor cells can be successfully differentiated into insulin-producing cells, and thus they have the potential for treatment of type-1 diabetes mellitus.