Although induced pluripotent stem (iPS) cells have significant implications for overcoming most of the ethical issues associated with embryonic stem (ES) cells, there are still several unresolved issues related to the use of iPS cells for clinical applications, such as teratoma formation. In this study, we were able to generate tissue-specific stem (induced tissue-specific stem; iTS) cells from the pancreas (iTS-P) or liver (iTS-L) by transient overexpression of reprogramming factors, combined with tissue-specific selection. The generation of iTS cells was easier than that of iPS cells. The iTS-P/iTS-L cells express genetic markers of endoderm and pancreatic/hepatic progenitors and were able to differentiate into insulin-producing cells/hepatocytes more efficiently than ES cells. Subcutaneous transplantation of both types of iTS cells into immunodeficient mice resulted in no teratoma formation. The technology used for the transient overexpression of reprogramming factors and tissue-specific selection may be useful for the generation of other tissue-specific stem cells, and the generation of iTS cells could have important implications for the clinical application of stem cells.