Reduction in the functional mass of β-cells is a common denominator in most forms of diabetes. Since the replicative potential of β-cells is limited, the search for factors that trigger islet neogenesis becomes imperative. Here we tested the hypothesis that regenerating factors for the pancreas are either secreted by or present within the pancreatic milieu itself. For this purpose, we intraperitoneally injected pancreatic cell culture supernatant (PCCS), from normal pancreas, into streptozotocin(STZ)-induced diabetic mice for 15 consecutive days. The PCCS-treated mice showed sustained reversal in 77.77% of experimental diabetic mice as evidenced by restoration of normoglycemia, increase in serum insulin levels and occurrence of neo islets in histopathological studies during a two month follow up, as opposed to the control diabetic mice which remained hyperglycemic throughout. In order to examine the potential of PCCS to bring about the regeneration of islets, we treated intra-islet precursor cells with PCCS in vitro, which led to the neogenesis of islets as evidenced by dithiozone and insulin immunostaining. These findings substantiate our hypothesis and make the search for regenerative factors converge towards the pancreas and its immediate surroundings. Such regenerative approaches, in combination with other therapeutic strategies to promote islet neogenesis may, in future, provide a cure and/or better means for the control and management of diabetes.