During embryonic development, pluripotent endoderm tissue in the developing foregut may adopt pancreatic fate or hepatic fate depending on the activation of key developmental regulators. Transdifferentiation occurs between hepatocytes and pancreatic cells under specific conditions. Hepatocytes and pancreatic cells have the common endodermal progenitor cells. In this study we isolated hepatic stem/progenitor cells from embryonic day (ED) 12-14 Kun-Ming mice with fluorescence-activated cell sorting (FACS). The cells were cultured under specific conditions. The cultured cells deploy dithizone staining and immunocytochemical staining at the 15th, 30th and 40th day after isolation. The results indicated the presence of insulin-producing cells. When the insulin-producing cells were transplanted into alloxaninduced diabetic mice, the nonfasting blood glucose level was reduced. These results suggested that fetal liver stem/progenitor cells could be converted into insulin-producing cells under specific culture conditions. Fetal liver stem/progenitor cells could become the potential source of insulin-producing cells for successful cell transplantation therapy strategies of diabetes.