Pancreatic and duodenal homeobox gene-1 (PDX-1) regulates pancreas development during embryogenesis, whereas in the adult it controls β-cell function. Here we analyze whether PDX-1 functions as a pancreatic differentiation factor and a bona fide master regulator when ectopically expressed in mature fully differentiated liver in vivo. By ectopic and transient PDX-1 expression in liver in vivo, using the first generation recombinant adenoviruses, we demonstrate that PDX-1 induces in liver a wide repertoire of both exocrine and endocrine pancreatic gene expression. Moreover, PDX-1 induces its own expression (auto-induction), which in turn may explain the long lasting nature of the "liver to pancreas" transdifferentiation. Insulin as well glucagon-producing cells are mainly located in the proximity of hepatic central veins, possibly allowing direct hormone release into the bloodstream, without affecting normal hepatic function. Importantly, we demonstrate that hepatic insulin production triggered by Ad-CMV-PDX-1 recombinant adenovirus administration is functional and prevents streptozotocin-induced hyperglycemia in Balb/c mice even 8 months after the initial treatment. We conclude that PDX-1 plays an important instructive role in pancreas differentiation, not only from primitive gut endoderm but also from mature liver. Transconversion of liver to pancreas may serve as a novel approach for generating endocrine-pancreatic tissue that can replace malfunctioning β-cells in diabetics.