Transplanting islets serves best option for restoring lost beta cell mass and function. Small bio-chemical agents do have the potential to generate new islets mass, however lack of understanding about mechanistic action of these small molecules eventually restricts their use in cell-based therapies for diabetes. We recently reported “Swertisin” as a novel islet differentiation inducer, generating new beta cells mass more effectively. Henceforth, in the present study we attempted to investigate the molecular signals that Swertisin generate for promoting differentiation of pancreatic progenitors into islet cells. To begin with, both human pancreatic progenitors (PANC-1 cells) and primary cultured mouse intra-islet progenitor cells (mIPC) were used and tested for Swertisin induced islet neogenesis mechanism, by monitoring immunoblot profile of key transcription factors in time dependent manner. We observed Swertisin follow Activin-A mediated MEPK-TKK pathway involving role of p38 MAPK via activating Neurogenin-3 (Ngn-3) and Smad Proteins cascade. This MAP Kinase intervention in differentiation of cells was confirmed using strong pharmacological inhibitor of p38 MAPK (SB203580), which effectively abrogated this process. We further confirmed this mechanism in-vivo in partial pancreatectomised (PPx) mice model, where we could show Swertisin exerted potential increase in insulin transcript levels with persistent down-regulation of progenitor markers like Nestin, Ngn-3 and Pancreatic Duodenal Homeobox Gene-1 (PDX-1) expression, within three days post PPx. With detailed molecular investigations here in, we first time report the molecular mode of action of Swertisin for islet neogenesis mediated through MAP Kinase (MEPK-TKK) pathway involving Ngn-3 and Smad transcriptional regulation. These findings held importance for developing Swertisin as potent pharmacological drug candidate for effective and endogenous differentiation of islets in cell based therapy for diabetes.