Neonatal porcine pancreas has considerable capacity for growth and differentiation, making it an attractive potential source of islet tissue for xenotransplantation. Pancreases from 1-3-day-old newborn pigs were digested with collagenase and cultured for 8 days. The resulting cellular aggregates are called porcine neonatal pancreatic cell clusters (NPCCs). The mean yield of NPCCs from a newborn pig was 28,200 +/- 1700 islet equivalents. Cytokeratin 7 (CK7) was used as a marker for the immunostaining of pancreatic duct cells. In neonatal pancreas, 18% of the insulin-positive cells co-stained for CK7, thus being protodifferentiated. NPCCs also contained protodifferentiated cells; insulin/PP and insulin/somatostatin co-stained cells were more common than insulin/glucagon cells. Between 1 and 8 days of culture, the DNA content of the NPCCs fell to 16% and the insulin content to 33% of the starting value, mainly due to the preferential loss of exocrine cells. Transplantation of 2000 or 4000 NPCCs into diabetic nude mice typically normalized glucose values in 10-20 weeks. Mice with successful grafts had lower fasting blood glucose levels than normal mice and accelerated glucose clearance after an i.p. glucose load. The starting NPCCs consisted of 17% insulin-staining cells, but the grafts of mice with reversed diabetes consisted of 94% beta cells, with some co-stained for CK7, indicating that the grafts still contained immature cells. The mass of insulin-producing cells rose from 0.22 +/- 0.08 mg 1 week after transplantation to 4.34 +/- 0.27 mg in mice sacrificed at 27-35 weeks. In summary, NPCCs contain mostly islet precursor cells, which when transplanted into nude mice undergo striking differentiation and beta cell expansion.