Objective The addition of insulin therapy to transient expression of the transcription factor(pancreatic and duodenal homeobox gene1,PDX-1) may enable islet regeneration in the pancreas of diabetic mice. Methods Diabetes was induced in C57BL/6J mice(BG > 16.7 mmol/L) by streptozotocin intraperitoneal injection(200 mg/kg). Gene transfer was then performed by intra-pancreatic injection of an adenoviral vector (1×109 pfu)encoded witheither PDX-1(Ad-PDX-1) or LacZ (Ad-LacZ) control, followed by daily insulin administration. Body weight, blood glucose,and pancreas histology were monitored. Results Our results showed that insulin administration gradually decreased blood glucose level in Ad-Pdx1 group, which became euglycemic (BG < 11.1 mmol/L) and insulin-independent in about two to three weeks. Without insulin, however, no obvious effect was observed. The animals in the Ad-LacZ control group (with or without insulin therapy)remained hyperglycemic throughout the 30 days study course. Histological analysis showed that newly formed islets consisting solely of insulin-producing cells were induced in the pancreas of the mice treated with both insulin and Ad-PDX-1, while no or very few insulin positive cells were observed in control. Conclusion Transient expression of PDX-1 combined with insulin treatment effectively induced the regeneration of functional islet β cells in the pancreas of the diabetic mice, forming new islet and reversing diabetes. This approach may prove to be a novel strategy for the treatment of diabetes.