Diabetes is the most prevalent and serious metabolic disease, and the number of diabetic patients worldwide is increasing. The reduction of insulin biosynthesis in pancreatic beta-cells is closely associated with the onset and progression of diabetes, and thus it is important to search for ways to induce insulin-producing cells in non-beta-cells. In this study, we showed that a modified form of the pancreatic and duodenal homeobox factor 1 (PDX-1) carrying the VP16 transcriptional activation domain (PDX-1/VP16) markedly increases insulin biosynthesis and induces various pancreas-related factors in the liver, especially in the presence of NeuroD or neurogenin 3 (Ngn3). Furthermore, in streptozotocin-induced diabetic mice, PDX-1/VP16 overexpression, together with NeuroD or Ngn3, drastically ameliorated glucose tolerance. Thus PDX-1/VP16 expression, together with NeuroD or Ngn3, markedly induces insulin gene transcription and ameliorates glucose tolerance. This approach warrants further investigation and may have utility in the treatment of diabetes.