With more than 177 million people suffering from diabetes worldwide, and the number expected to double by 2030, finding new ways to treat this disease is a high priority. Intensive effort is being directed towards developing mechanisms for increasing beta-cell expansion as a diabetic therapeutic. Recent studies, in which adult bone marrow has been used to induce beta-cell expansion in mice, have shown both exciting and controversial results. In these reports, marrow-derived cells can contribute towards beta-cell maintenance both by promoting endogenous beta-cell expansion and possibly by transdifferentiation into beta-cells. These studies reveal mechanisms for potential therapeutic intervention.