Several differentiation or morphogenic factors have known to be involved in the developmental process of endocrine pancreas. However, mechanism of action and functional relation of these molecules are not well elucidated particularly in beta-cell formation from adult pancreatic stem cells. We hypothesized that adult pancreatic stem cells could be activated by the functional resumption of the morphogenic factors that were involved in embryonic development of pancreas in the duct system under the specific conditions such as tissue injuries. Besides the well-established genes including Pdx-1 and Ngn-3, we propose the nestin and clusterin as the new morphogenic factors for beta-cell neogenesis and their functional associations. We found extensive in vivo formation of ductules showing a higher replicating ability following the experimental tissue injury. These neogenic ductules were lined with low epithelial cells positive for the nestin, which has been known as neuronal stem cell marker. In in vitro culture, the nestin-rich epithelial cells of the neogenic ductules also displayed extensive self-replication leading to monolayer of epithelial cell explants and transformed into the insulin secreting beta cells as well as duct cells. Thus, we depicted them as nestin-positive duct stem (NPDS) cells. We found a neogenesis specific protein 'clusterin' in the regenerating pancreatic tissues with concomitant increase of Pdx-1 and Ngn-3 expression. The protein is expressed predominantly in the neogenic pancreas undergoing differentiation. In vitro over-expression of the clusterin gene strongly induces beta-cell transformation from neogenic ductal cells. Insulin expression, both insulin mRNA and peptide levels, was increased and showed glucose dependent manner by ectopic expression of clusterin upon the culture of neogenic ductules when compared to the mock-transfected control, implying that the duct cells transformed functional beta cells. We observed that clusterin over-expression led to up-regulation of Pdx-1 and Ngn-3, and clusterin levels were increased upon the transfection of cDNAs of Pdx-1 or Ngn-3, suggesting a close functional association of these morphogenic factors. In conclusion, we suggest that adult pancreatic stem cells can be recapitulated for neogenesis of insulin secreting beta cells not only by reactivation Pdx-1 and Ngn-3, the classical differentiation factors for pancreas development, but also by the intervention of new morphogenic factors including nestin and clusterin. In particular, by modulation of Pdx-1 and Ngn-3, clusterin induces remarkable differentiation of the functional beta cells secreting insulin in response to glucose stimulation.