In this article, we describe novel conditions for culture, expansion, and transdifferentiation of primary human dermal fibroblasts (hDFs) to induce expression of transcription factors (TFs) and hormones characteristic of the islets of Langerhans. We show that histones associated with the insulin gene are hyperacetylated and that insulin gene DNA is less methylated in islet cells compared to cells that do not express insulin. Using two compounds that alter the epigenetic signature of cells, romidepsin (Romi), a histone deacetylase inhibitor, and 5-Azacytidine (5-AzC), a chemical analogue of cytidine that cannot be methylated, we show that hDFs exhibit a distinctive regulation of expression of TFs involved in islet development as well as of induction of glucagon and insulin. Overexpression of Pdx1, a TF important for islet differentiation, and silencing of musculoaponeurotic fibrosarcoma oncogene homolog B, a TF that is expressed in mature glucagon-producing cells, result in induction of insulin to a higher level compared to Romi and 5-AzC alone. The cells obtained from this protocol exhibit glucose-stimulated insulin secretion and lower blood glucose levels of diabetic mice. These data show that fully differentiated nonislet-derived cells could be made to transdifferentiate to islet-like cells and that combining epigenetic modulation with TF modulation leads to enhanced insulin expression.