Beta-cell replacement represents the ultimate cure for type 1 diabetes, however it is limited by availability of organ donors. Adult human islets are difficult to propagate in culture, and efforts to expand them result in dedifferentiation. Here we describe conditions for expansion of adult human islet cells, as well as a way for their redifferentiation. Most cells in islets isolated from human pancreata were induced to replicate within the first week of culture in expansion medium. Cells were propagated for 16 population doublings, without a change in replication rate or noticeable cell mortality, representing an expansion of over 65,000-fold. Replication was accompanied by a decrease in expression of key beta-cell genes. Shift of the cells to differentiation medium containing betacellulin resulted in redifferentiation, as manifested by restoration of beta-cell gene expression and insulin content. These methods may allow transplantation of functional islet cells from single donors into multiple recipients.