Although several studies have suggested that insulin-secreting cells can be generated in vitro from cells residing in adult exocrine pancreas, neither the origin of these cells nor their precise insulin secretory properties was obtained. We show here that insulin-secreting cells can be derived from adult mouse pancreatic exocrine cells by suspension culture in the presence of EGF and nicotinamide. The frequency of insulin-positive cells was only 0.01% in the initial preparation and increased to approximately 5% in the culture conditions. Analysis by the Cre/loxP-based direct cell lineage tracing system indicates that these newly made cells originate from amylase/elastase-expressing pancreatic acinar cells. Insulin secretion is stimulated by glucose, sulfonylurea, and carbachol, and potentiation by glucagon-like peptide-1 also occurs. Insulin-containing secretory granules are present in these cells. In addition, we found that the enzymatic dissociation of pancreatic acini itself leads to activation of EGF signaling, and that inhibition of EGF receptor kinase blocks the transdifferentiation. These data demonstrate that pancreatic acinar cells can transdifferentiate into insulin-secreting cells with secretory properties similar to those of native pancreatic beta cells, and that activation of EGF signaling is required in such transdifferentiation.