Transcription factor mediated lineage reprogramming of human pancreatic exocrine tissue could conceivably provide an unlimited supply of islets for transplantation in the treatment of diabetes. Exocrine tissue can be efficiently reprogrammed to islet-like cells using a cocktail of transcription factors: Pdx1, Ngn3, MafA and Pax4 in combination with growth factors. We show here that overexpression of exogenous Pax4 in combination with suppression of the endogenous transcription factor ARX considerably enhances the production of functional insulin-secreting β-like cells with concomitant suppression of α-cells. The efficiency was further increased by culture on laminin-coated plates in media containing low glucose concentrations. Immunocytochemistry revealed that reprogrammed cultures were composed of ~45% islet-like clusters comprising >80% monohormonal insulin+ cells. The resultant β-like cells expressed insulin protein levels at ~15-30% of that in adult human islets, efficiently processed proinsulin and packaged insulin into secretory granules, exhibited glucose responsive insulin secretion, and had an immediate and prolonged effect in normalising blood glucose levels upon transplantation into diabetic mice. We estimate that approximately 3 billion of these cells would have an immediate therapeutic effect following engraftment in type 1 diabetes patients and that one pancreas would provide sufficient tissue for numerous transplants.