Studies of islet neogenesis have suggested that the regeneration of islet cells can be achieved through redifferentiation of pre-existing islet cells. However, this hypothesis is largely unproven and fails to account for the diversity of observed islet neogenesis. Here we show that cultured neonatal pancreatic cells dedifferentiate into beta III tubulin-expressing precursors, which then expand and redifferentiate into both neural and pancreatic lineage progenies. Redifferentiation happens not only in the islet cells, but also in the ductal cells that may represent what are called ductal origin "pancreatic stem cells". The it? vitro redifferentiation of neonatal pancreatic cells recapitulates the embryonic development by sequential endocrine differentiation accompanied by the coexpression of neuronal marker beta III tubulin with endocrine hormones until terminal differentiation. The neuronal differentiation of pancreatic cells, however, occurs prior to endocrine differentiation and gradually becomes dominant, thus implying a default neuronal lineage specification for cultured pancreatic cells. (c) 2006 Elsevier Inc. All rights reserved.