Pancreatic beta cell lines may offer an abundant source of cells for beta-cell replacement in type I diabetes. Using regulatory elements of the bacterial tetracycline (tet) operon for conditional expression of SV40 T antigen oncoprotein in transgenic mouse beta cells, we have shown that reversible immortalization is an efficient approach for regulated beta-cell expansion, accompanied by enhanced cell differentiation upon growth arrest. The original system employed the tet-off approach, in which the cells proliferate in the absence of tet ligands and undergo growth arrest in their presence. The disadvantage of this system is the need for continuous treatment with the ligand in vivo for maintaining growth arrest. Here we utilized the tet-on regulatory system to generate beta cell lines in which proliferation is regulated in reverse: these cells divide in the presence of tet ligands, and undergo growth arrest in their absence, as judged by [3H]thymidine and BrdU incorporation assays. These cell lines were derived from insulinomas, which heritably developed in transgenic mice continuously treated with the tet derivative doxycycline (dox). The cells produce and secrete high amounts of insulin, and can restore and maintain euglycemia in syngeneic streptozotocin-induced diabetic mice in the absence of dox. Such a system is more suitable for transplantation, compared with cells regulated by the tet-off approach, because ligand treatment is limited to cell expansion in culture and is not required for long-term maintenance of growth arrest in vivo.