Pdx1 (pancreatic and duodenal homeobox 1), Ngn3 (neurogenin 3) and MafA (v-maf musculoaponeurotic fibrosarcoma oncogene family, protein A) have been reported to bring about the transdifferentiation of pancreatic exocrine cells to beta (β) cells in vivo. We have investigated the mechanism of this process using a standard in vitro model of pancreatic exocrine cells, the rat AR42j-B13 cell line. We constructed a new adenoviral vector encoding all three genes, called Ad-PNM (adenoviral Pdx1, Ngn3, MafA construct). When introduced into AR42j-B13 cells, Ad-PNM caused a rapid change to a flattened morphology and a cessation of cell division. The expression of exocrine markers is suppressed. Both insulin genes are up-regulated as well as a number of transcription factors normally characteristic of beta cells. At the chromatin level, histone tail modifications of the Pdx1, Ins1 (insulin 1) and Ins2 (insulin 2) gene promoters are shifted in a direction associated with gene activity, and the level of DNA CpG methylation is reduced at the Ins1 promoter. The transformed cells secrete insulin and are capable of relieving diabetes in streptozotocin-treated NOD-SCID (non-obese diabetic severe combined immunodeficiency) mice. However the transformation is not complete. The cells lack expression of several genes important for beta cell function and they do not show glucose-sensitive insulin secretion. We conclude that, for this exocrine cell model, although the transformation is dramatic, the reprogramming is not complete and lacks critical aspects of the beta cell phenotype.