Beta (beta)-cell replacement represents an attractive approach for the possible cure of type 1 insulin-dependent diabetes mellitus (IDDM). In a search for potential sources of insulin-secreting cells for IDDM substitution therapy, we have focused on the neonatal pig liver, which is putatively enriched in multipotent stem cells. We then isolated cells measuring 10 to 15 microm in diameter, identified as small cells, characterized by a high proliferation rate and positive staining for immature liver and pancreatic endocrine cell markers (i.e., insulin and pancreatic duodenal homeobox). The ability of these cells to transdifferentiate into pancreatic beta-like cells under culture conditions with exendin-4 (Ex-4) or high glucose concentration was examined. We observed that insulin secretion was not physiological in basal conditions, although it became responsive to glucose after 5 days of exposure to Ex-4. This beta-cell-like phenotype remained physiologically stable, even after stimulus withdrawal. Based on these observations, we contend that the proposed cell and tissue model might offer several advantages as a candidate for substitution cell therapy in IDDM, because the neonatal pig liver seems enriched in cells, with a mixed pancreas-liver phenotype, that are easier to purify and grow in culture and are more functional than other beta-like cells upon in vitro single short-term stimulation challenge.