Based upon existing methods of isolating fetal porcine islet tissue, a simple, reliable procedure was developed for the preparation of porcine neonatal islet cell aggregates with a reproducible and defined cellular composition. After 9 d of in vitro culture, tissue from one neonatal pig pancreas yielded approximately 50,000 islet cell aggregates, consisting of primarily epithelial cells (57%) and pancreatic endocrine cells (35%). During the culture period, the total beta cell mass decreased initially, but subsequently increased 1.5-fold between days 3 and 9. Transplantation of grafts consisting of 3 x 10(5) beta cells (1,000 aggregated) under the kidney capsule of alloxan-diabetic nude mice corrected hyperglycemia in 75% (10/13) of the animals, whereas, 100% (20/20) of recipients implanted with 6 x 10(5) beta cells (2,000 aggregates) achieved euglycemia within 8 wk posttransplantation. Nephrectomy of the graft bearing kidney at 14 wk posttransplantation resulted in hyperglycemia in all recipients, and examination of the grafts revealed the presence of numerous well-granulated insulin- and glucagon-containing cells. The cellular insulin content of these grafts was 20 to 30-fold higher than at the time of transplantation. These results indicate that the neonatal porcine pancrease can be used as a source of large numbers of viable islet cells, which have the potential for growth both in vitro and in vivo, and exhibit the metabolic capacity to correct diabetes in nude mice.