In the present study, we successfully isolated PDMSCs from human placental tissues. The RT-PCR results show that PDMSCs preserved the genetic characteristics of the primitive embryonic stage-Oct-4 and Nanog. By using serum-free medium supplemented essential growth factors and induction medium culture for 4 weeks, a monolayer of spindle-like PDMSCs gradually formed 3D spheroid bodies (SB-PDMSCs). By using real-time RT-PCR, early mRNA expressions of Pdx1, as well as the Sox17 and Foxa2 genes, were observed to be significantly activated in SB-PDMSCs, followed by the expression of mature pancreas-related genes (insulin, glucagon, and somatostatin). The high insulin content of SB-PDMSCs was further confirmed by ELISA assay, and the glucose dependency was demonstrated by the corresponding insulin secretion level. In a transplantation study of streptozotocin-pretreated nude mice, the restoration of normoglycemia in the SB-PDMSC treated group was further observed. In conclusion, these results indicate that PDMSCs are an excellent source for the induced differentiation of well-functioning insulin-positive cells. The potential of these insulin producing cells derived from PDMSCs was also demonstrated functionally by the demonstration of secreted insulin in vitro and effective control of blood glucose levels in vivo. (c) 2007 Elsevier Inc. All rights reserved.