<p><b>BACKGROUND</b>Stem cells, which have the ability to differentiate into insulin-producing cells (IPCs), would provide a potentially unlimited source of islet cells for transplantation and alleviate the major limitations of availability and allogeneic rejection. Therefore, the utilization of stem cells is becoming the most promising therapy for diabetes mellitus (DM). Here, we studied the differentiation capacity of the diabetic patient's bone marrow-derived mesenchymal stem cells (MSCs) and tested the feasibility of using MSCs for beta-cell replacement.</p><p><b>METHODS</b>Bone marrow-derived MSCs were obtained from 10 DM patients (5 type 1 DM and 5 type 2 DM) and induced to IPCs under a three-stage protocol. Representative cell surface antigen expression profiles of MSCs were analysed by flow cytometric analysis. Reverse transcription-polymerase chain reaction (RT-PCR) was performed to detect multiple genes related to pancreatic beta-cell development and function. The identity of the IPCs was illustrated by the analysis of morphology, ditizone staining and immunocytochemistry. Release of insulin by these cells was confirmed by immunoradioassay.</p><p><b>RESULTS</b>Flow cytometric analysis of MSCs at passage 3 showed that these cells expressed high levels of CD29 (98.28%), CD44 (99.56%) and CD106 (98.34%). Typical islet-like cell clusters were observed at the end of the protocol (18 days). Ditizone staining and immunohistochemistry for insulin were both positive. These differentiated cells at stage 2 (10 days) expressed nestin, pancreatic duodenal homeobox-1 (PDX-1), Neurogenin3, Pax4, insulin, glucagon, but at stage 3 (18 days) we observed the high expression of PDX-1, insulin, glucagon. Insulin was secreted by these cells in response to different concentrations of glucose stimulation in a regulated manner (P<0.05).</p><p><b>CONCLUSIONS</b>Bone marrow-derived MSCs from DM patients can differentiate into functional IPCs under certain conditions in vitro. Using diabetic patient's own bone marrow-derived MSCs as a source of autologous IPCs for beta-cell replacement would be feasible.</p>