Novel strategies in diabetes therapy would obviously benefit from the use of beta (beta) cell stem/progenitor cells. However, whether or not adult beta cell progenitors exist is one of the most controversial issues in today's diabetes research. Guided by the expression of Neurogenin 3 (Ngn3), the earliest islet cell-specific transcription factor in embryonic development, we show that beta cell progenitors can be activated in injured adult mouse pancreas and are located in the ductal lining. Differentiation of the adult progenitors is Ngn3 dependent and gives rise to all islet cell types, including glucose responsive beta cells that subsequently proliferate, both in situ and when cultured in embryonic pancreas explants. Multipotent progenitor cells thus exist in the pancreas of adult mice and can be activated cell autonomously to increase the functional beta cell mass by differentiation and proliferation rather than by self-duplication of pre-existing beta cells only.