The use of adult hepatic stem cells for the treatment of diabetes, based both on the close embryological association of the pancreas and liver, and on a putative shared tissue stem cell, has been proposed by a number of studies. This study investigated the capacity of hepatic oval cells to differentiate into pancreatic endocrine cells in the presence of pancreatic mesoderm. The GaIN model of hepatic injury was used to induce oval cell activation in Male Sprague-Dawley rats. A viable and significant oval cell population could not however, be isolated and propagated in culture. In order to continue experimentation, a PHeSC-A2 cell line, derived from normal adult porcine liver, was cultured with quail pancreatic mesoderm in the GFRM-Ham s F12.ITS culture system. Cells demonstrating positive immulocalization of the pancreatic markers, insulin and glucagon, were identified as PHeSC-A2-derived, by visual assessment of their nuclear morphology. Techniques used to confirm these results and preclude the derivation of the pancreatic endocrine cells from pancreatic endodermal contamination, proved ineffectual. The tentative results obtained in this study have lead to the following postulations: firstly, the PHeSC-A2 cell line may possess a higher level of potentiality than previously demonstrated; secondly, this potential may be due to the shared embryological origins of the pancreas and liver, and thirdly, permissive signaling from pancreatic mesoderm may have the capacity to induce the differentiation of hepatic oval cells into pancreatic endocrine cells. Further research is required to confirm the results obtained in this study and to substantiate the aforementioned propositions.