The search for putative precursor cells within the pancreas has been the focus of extensive research. Rare adult mouse pancreas-derived multipotent precursor (PMP) cells, possessing the intriguing capacity to generate cross-germ layer progeny in the pancreatic and neural lineages, have been identified. Here, genetic lineage-labeling experiments excluded the neural crest, and established the embryonic pancreas, as the developmental source of PMPs. The PMP cell is shown to express insulin in vivo, providing reconciliation with reports that new adult β-cells are formed exclusively by self-replication. These insulin+stem cells were found to contribute to multiple pancreatic and neural cell populations in vivo. Further, PMP cells were isolated from adult human islet tissue, each capable of extensive proliferation, self-renewal, and generation of multiple differentiated pancreatic and neural cell types, including≤cell progeny displaying regulated insulin secretion. Finally, both mouse and human PMP-derived cells were shown to ameliorate diabetes in transplanted mice. These findings demonstrate that the adult mammalian pancreas contains a population of insulin+multipotent stem cells.