The intestinal hormone glucagon-like peptide-1 (GLP-1) has been shown to promote an increase in pancreatic beta-cell mass via proliferation of islet cells and differentiation of non-insulin-secreting cells. In this study, we have characterized some of the events that lead to the differentiation of pancreatic ductal cells in response to treatment with human GLP-1. Rat pancreatic ductal (ARIP) cells were cultured in the presence of GLP-1 and analyzed for cell counting, cell cycle distribution, expression of cyclin-dependent-kinase (Cdk) inhibitors, transcription of beta-cell-specific genes, loss of ductal-like phenotype and acquisition of beta-cell-like gene expression profile. Exposure of ARIP cells to 10 nM GLP-1 induced a significant reduction in the cell replication rate and a significant decrease in the percentage of cells in S phase of the cell cycle. This was associated with an increase in the number of cells in G0-G1 phase and a reduction of cells in G2-M phase. Western blot analysis for the Cdk inhibitors, kinase inhibitor protein 1 (p27(Kip1)) and Cdk-interacting protein 1 (p21(Cip1)), demonstrated a significant increase in p27(Kip1) and p21(Cip1) levels within the first 24 h from the beginning of GLP-1 treatment. As cells slowed down their proliferation rate, GLP-1 also induced a time-dependent expression of various beta-cell-specific mRNAs. The glucose transporter GLUT-2 was the first of those factors to be expressed (24 h treatment), followed by insulin (44 h) and finally by the enzyme glucokinase (56 h). In addition, immunocytochemistry analysis showed that GLP-1 induced a time-dependent down-regulation of the ductal marker cytokeratin-20 (CK-20) and a time-dependent induction of insulin expression. Finally, GLP-1 promoted a glucose-dependent secretion of insulin, as demonstrated by HPLC and RIA analyses of the cell culture medium. The present study has demonstrated that GLP-1 induces a cell cycle re-distribution with a decrease in cell proliferation rate prior to promoting the differentiation of cells towards an endocrine-like phenotype.