AIM: To explore the possibility of marrow mesenchymal stem cells (MSC)in vitro differentiating into functional isletlike cells and to test the diabetes therapeutic potency of Islet-like cells.METHODS: Rat MSCs were isolated from Wistar rats and cultured. Passaged MSCs were induced to differentiate into islet-like cells under following conditions: pre-induction with L-DMEM including 10 mmol/L nicotinamide+1 mmol/L β-mercaptoethanol+200 mL/L fetal calf serum (FSC) for 24 h,followed by induction with serum free H-DMEM solution including 10 mmol/L nicotinamide+ 1 mmol/L,β-mercaptoethanol for 10 h. Differentiated cells were observed under inverse microscopy, insulin and nestin expressed in differentiated cells were detected with immunocytochemistry. Insulin excreted from differentiated cells was tested with radioimmunoassay. Rat diabetic models were made to test in vivo function of differentiated MSCs.RESULTS: Typical islet -like clustered cells were observed.Insulin mRNA and protein expressions were positive in differentiated cells, and nestin could be detected in predifferentiated cells. Insulin excreted from differentiated MSCs (446.93±102.28 IU/L) was much higher than that from pre-differentiated MSCs (2.45±0.81 IU/L (P＜0.01).Injected differentiated MSCs cells could down-regulate glucose level in diabetic rats.CONCLUSION: Islet-like functional cells can be differentiated from marrow mesenchymal stem cells, which may be a new procedure for clinical diabetes stem -cell therapy, these cells can control blood glucose level in diabetic rats. MSCs may play an important role in diabetes therapy by islet differentiation and transplantation.