Highly purified hepatic stem cells are trans-differentiated into pancreatic endocrine hormone-producing cells by culturing them in vitro in a medium containing high levels of glucose. These trans-differentiated cells express insulin, glucagon, and pancreatic polypeptide, but not hepatocyte protein Hep-par. When stimulated with glucose, these cells synthesize and secrete insulin, a response enhanced by nicotinamide. Transplantation of these trans-differentiated cells into a hyperglycemic animal normalizes blood sugar levels in the animal.