Recent advances in pancreatic islet transplantation emphasize the potential of this approach for the long-term control of blood glucose levels as treatment of diabetes. To overcome the organ shortage for cell replacement therapy, efforts are being invested in generating new and abundant sources of insulin-producing cells from embryonic or adult stem cells. We review recent evidence documenting the surprising capacity of the mature liver to serve as a potential source of tissue for generating functional endocrine pancreas. The process of liver-to-pancreas developmental redirection is induced by ectopic expression of pancreatic transcription and differentiation factors. This approach may allow the diabetic patient to be the donor of his or her own therapeutic tissue, thus alleviating both the need for allotransplantations and the subsequent immune suppression.