To test whether pancreatic duct cells are in vitro progenitors, they were purified from dispersed islet-depleted human pancreatic tissue using CA19-9 antibody. The purified fraction was almost entirely CK19+ with no insulin+ cells, whereas the unpurified cells (crude duct) were 56% CK19+ and 0.4% insulin+ of total cells (0.7% of CK19+ cells). These cells were expanded as monolayers, aggregated under serum-free conditions, and transplanted into normoglycemic NOD/SCID mice. In crude duct grafts, insulin+ cells increased to 6.1% of CK19+ cells. Purified duct cells had slow expansion and poor aggregation, as well as engraftment. The addition of 0.1% cultured stromal cells improved these parameters. These stromal cells contained no CK19+ cells and no insulin by either quantitative RT-PCR or immunohistochemistry; stromal cell aggregates and grafts contained no insulin+ cells. Aggregation of purified duct plus stromal preparations induced insulin+ cells (0.1% of CK19+ cells), with further increase to 1.1% in grafts. Insulin mRNA mirrored these changes. In these grafts, all insulin+ cells were in duct-like structures, while in crude duct grafts, 85% were. Some insulin+ cells coexpressed duct markers (CK19 and CA19-9) and heat shock protein (HSP)27, a marker of nonislet cells, suggesting the transition from duct. Thus, purified duct cells from adult human pancreas can differentiate to insulin-producing cells.