Insulin gene expression is restricted to islet beta cells of the mammalian pancreas through specific control mechanisms mediated in part by specific transcription factors. The protein encoded by the pancreatic and duodenal homeobox gene 1 (PDX-1) is central in regulating pancreatic development and islet cell function. PDX-1 regulates insulin gene expression and is involved in islet cell-specific expression of various genes. Involvement of PDX-1 in islet-cell differentiation and function has been demonstrated mainly by 'loss-of-function' studies. We used a 'gain-of-function' approach to test whether PDX-1 could endow a non-islet tissue with pancreatic beta-cell characteristics in vivo. Recombinant-adenovirus-mediated gene transfer of PDX-1 to the livers of BALB/C and C57BL/6 mice activated expression of the endogenous, otherwise silent, genes for mouse insulin 1 and 2 and prohormone convertase 1/3 (PC 1/3). Expression of PDX-1 resulted in a substantial increase in hepatic immunoreactive insulin content and an increase of 300% in plasma immunoreactive insulin levels, compared with that in mice treated with control adenovirus. Hepatic immunoreactive insulin induced by PDX-1 was processed to mature mouse insulin 1 and 2 and was biologically active; it ameliorated hyperglycemia in diabetic mice treated with streptozotocin. These data indicate the capacity of PDX-1 to reprogram extrapancreatic tissue towards a beta-cell phenotype, may provide a valuable approach for generating 'self' surrogate beta cells, suitable for replacing impaired islet-cell function in diabetics.