Stem cell technologies hold great potential for the treatment of type 1 diabetes, provided that functional transplantable beta-cells can be selectively generated in an efficient manner. Such a process should recapitulate, at least to a certain extent, the embryonic development of beta-cells in vitro. However, progress at identifying the transcription factors involved in beta-cell development has not been accompanied by a parallel success at unraveling the pattern of their instructive extracellular signals. Here we present proof of principle of a novel approach to circumvent this problem, based on the use of the HIV/TAT protein transduction domain. Neurogenin 3 (ngn3), a factor whose expression is essential for pancreatic endocrine differentiation, was fused to the TAT domain. Administration of TAT/ngn3 to cultured pancreatic explants results in efficient uptake, nuclear translocation, and stimulation of downstream reporter and endogenous genes. Consistent with the predicted activity of the protein, e9.5 and e13.5 mouse pancreatic explants cultured in the presence of TAT/ngn3 show an increased level of endocrine differentiation compared with control samples. Our results raise the possibility of sequentially specifying stem/progenitor cells toward the beta-cell lineage, by using the appropriate sequence and combination of TAT-fused transcription factors.