We showed previously that undifferentiated, proliferating human islet-derived precursor cells (hIPCs) are a type of mesenchymal stem/stromal cell (MSC) that can be induced by serum deprivation to form clusters and ultimately differentiate in vitro to endocrine cells. We also demonstrated that partially differentiated hIPC clusters, when implanted under the kidney capsules of mice, continued to differentiate in vivo into hormone-producing cells. However, we noted that not all hIPC preparations yielded insulin-secreting cells in vivo and that in some animals no hormone-expressing cells were found. This suggested that the implanted cells were not always irreversibly committed to further differentiation and may even de-differentiate to a mesenchymal phenotype. In this study, we show that human cells with a mesenchymal phenotype are indeed found in the grafts of mice implanted with hIPCs in epithelial cell clusters (ECCs), which are obtained after 4-day in vitro culture of hIPCs in serum-free medium (SFM); mesenchymal cells were predominant in some grafts. We could mimic the transition of ECCs to de-differentiated mesenchymal cells in vitro by exposure to foetal bovine serum (FBS) or mouse serums, and to a significantly lesser extent to human serum. In a complementary series of experiments, we show that mouse serum and FBS are more effective stimulants of mesenchymal hIPC migration than is human serum. We found that proliferation was not needed for the transition from ECCs to de-differentiated cells because mitomycin-treated hIPCs that could not proliferate underwent a similar transition. Lastly, we show that cells exhibiting a mesenchymal phenotype can be found in grafts of adult human islets in mice. We conclude that epithelial-to-mesenchymal transition (EMT) of cells in hIPC ECCs can occur following implantation in mice. This potential for EMT of human islets or differentiated precursor cells must be considered in strategies for cell replacement therapy for diabetes.