To determine if pancreatic progenitor cells can be induced to form insulin producing cells in vivo, we auto-transplanted fragments of streptozotocin-induced diabetic pancreas into omentum pre-injected with a foreign material. As shown previously, omentum pre-activated in this manner becomes rich in growth factors and progenitor cells. After auto-transplanting diabetic pancreas in the activated omentum, new insulin secreting cells appeared in the omentum in niches surrounding the foreign particles-a site previously shown to harbor progenitor cells. Extracts of these omenta contained measurable insulin. Four of eight diabetic animals treated in this manner became normoglycemic. This shows that new insulin producing cells can be regenerated from diabetic pancreas by auto-transplanting pancreatic fragments into the activated omentum, an environment rich in growth factors and progenitor cells. (c) 2007 Elsevier Inc. All rights reserved.