The ability of the adult pancreas to generate new insulin (beta) cells has been controversial because of difficulties in unequivocally identifying the precursor population. We recently determined that beta cells were generated during development from precursors that expressed the homeodomain-containing transcription factor pancreas duodenum homeobox gene-1 (PDX-1). To investigate whether PDX-1+ stem cells are present in adult pancreas, we examined two animal models of diabetes. One model was produced by injecting adult mice with streptozotocin (SZ), a toxin that produces hyperglycemia due to rapid and massive beta cell death. After SZ-mediated elimination of existing IN+/PDX-1+ cells, a population of somatostatin (SOM)+/PDX-1+ cells, a cell type thought to represent an embryonic islet precursor cell, appeared in islets. The appearance of SOM+/PDX-1+ cells was followed in time by the differentiation to SOM+/IN+/PDX-1+ cells. SOM+/PDX-1+ cells also appeared in islets of nonobese diabetic mice, a strain of mice in which beta cell destruction is immune-mediated. Our findings establish the existence of PDX-1+ beta cell precursors in the adult pancreas and indicate that their differentiation is induced by islet injury.