Understanding and manipulating pancreatic beta-cell proliferation is a major challenge for pancreas biology and diabetes therapy. Recent studies have raised the possibility that human beta-cells can undergo dedifferentiation and give rise to highly proliferative mesenchymal cells, which retain the potential to redifferentiate into beta-cells. To directly test whether cultured beta-cells dedifferentiate, we applied genetic lineage tracing in mice. Differentiated beta-cells were heritably labeled using the Cre-lox system, and their fate in culture was followed. We provide evidence that mouse beta-cells can undergo dedifferentiation in vitro into an insulin-, pdx1-, and glut2-negative state. However, dedifferentiated beta-cells only rarely proliferate under standard culture conditions and are eventually eliminated from cultures. Thus, the predominant mesenchymal cells seen in cultures of mouse islets are not of a beta-cell origin.