To explore induced islet neogenesis in the liver as a strategy for the treatment of diabetes, we used helper-dependent adenovirus (HDAD) to deliver the pancreatic duodenal homeobox-1 gene (Ipf1; also known as Pdx-1) to streptozotocin (STZ)-treated diabetic mice. HDAD is relatively nontoxic as it is devoid of genes encoding viral protein. Mice treated with HDAD-Ipf1 developed fulminant hepatitis, however, because of the exocrine-differentiating activity of Ipf1. The diabetes of STZ mice was partially reversed by HDAD-mediated transfer of NeuroD (Neurod), a factor downstream of Ipf1, and completely reversed by a combination of Neurod and betacellulin (Btc), without producing hepatitis. Treated mice were healthy and normoglycemic for the duration of the experiment (>120 d). We detected in the liver insulin and other islet-specific transcripts, including proinsulin-processing enzymes, beta-cell-specific glucokinase and sulfonylurea receptor. Immunocytochemistry detected the presence of insulin, glucagon, pancreatic polypeptide and somatostatin-producing cells organized into islet clusters; immuno-electron microscopy showed typical insulin-containing granules. Our data suggest that Neurod-Btc gene therapy is a promising regimen to induce islet neogenesis for the treatment of insulin-dependent diabetes.