Transdifferentiation is a change from one differentiated phenotype to another, involving morphological and functional phenotypic markers. Stability of the cellular phenotype is probably related to the extracellular milieu, as well as cytoplasmic and nuclear components that interact to control gene expression, and the conversion of cell phenotype is likely to be accomplished by selective enhancement of gene expression, which controls the terminal developmental commitment of cells. In this paper, we show the induction of cultured human islets cells to alter their usual phenotypic expression and attain morphological and functional characteristics of duct cells. Islets were isolated by collagenase digestion of pancreata that were removed from cadaveric organ donors. The islets were purified on a two-step density gradient of bovine serum albumin and were then placed into a three-dimensional rat-tail collagen gel matrix supplemented with NuSerum epithelial growth factor and cholera toxin. During the initial 96 h of culture, the islets underwent a cystic transformation that was associated with (1) the maintenance of immunoreactivity for neuron-specific enolase, an endocrine cell marker, but a progressive loss of insulin gene expression, (2) a loss of immunoreactivity for insulin protein, and (3) the appearance of CK-19, a marker for ductal cells. After the transformation was complete, the cells had the ultrastructural appearance of primitive duct-like cells. Cyst enlargement after the initial 96 h was associated, at least in part, with cell replication, as reflected in the 1500% increase in the incorporation of tritiated thymidine. These experiments are consistent with the transdifferentiation of an islet cell to a ductal cell. The exact mechanisms involved still need to be fully elucidated.