Insulin deficiency in type 1 diabetes leads to disruptions in glucose, lipid, and ketone metabolism with resultant hyperglycemia, hyperlipidemia, and ketonemia. Exogenous insulin and hepatic insulin gene therapy cannot mimic the robust glucose-stimulated insulin secretion (GSIS) from native pancreatic islets. Gene therapy of streptozotocin-diabetic mice with neurogenin 3 (Ngn3) and betacellulin (Btc) leads to the induction of periportal oval cell-derived neo-islets that exhibit GSIS. We hence hypothesized that this gene therapy regimen may lead to a complete correction of the glucose and lipid metabolic abnormalities associated with insulin deficiency; we further hypothesized that the neo-islets formed in response to Ngn3-Btc gene delivery may display an ultrastructure and transcription profile similar to that of pancreatic islets. We injected streptozotocin-diabetic mice with helper-dependent adenoviral vectors carrying Ngn3 and Btc, which restored GSIS and reversed hyperglycemia in these animals. The treatment also normalized hepatic glucose secretion and reversed ketonemia. Furthermore, it restored hepatic glycogen content and reinstated hepatic lipogenesis-related gene transcripts back to nondiabetic levels. By transmission electron microscopy, the neo-islets displayed electron-dense granules that were similar in appearance to those in pancreatic islets. Finally, using RNA obtained by laser capture microdissection of the periportal neo-islets and normal pancreatic islets, we found that the neo-islets and pancreatic islets exhibited a very similar transcription profile on microarray-based transcriptome analysis. Taken together, this indicates that Ngn3-Btc gene therapy corrects the underlying dysregulated glucose and lipid metabolism in insulin-deficient diabetic mice by inducing neo-islets in the liver that are similar to pancreatic islets in structure and gene expression profile.