We have previously obtained a clonal population of cells from human foreskin that is able to differentiate into mesodermal, ectodermal and endodermal progenies. It is of great interest to know whether these cells could be further differentiated into functional insulin-producing cells. Sixty-one single-cell-derived dermal fibroblast clones were established from human foreskin by limiting dilution culture. Of these, two clones could be differentiated into neuron-, adipocyte- or hepatocyte-like cells under certain culture conditions. In addition, those two clones were able to differentiate into islet-like clusters under pancreatic induction. Insulin, glucagon and somatostatin were detectable at the mRNA and protein levels after induction. Moreover, the islet-like clusters could release insulin in response to glucose in vitro. This is the first study to demonstrate that dermal fibroblasts can differentiate into insulin-producing cells without genetic manipulation. This may offer a safer cell source for future stem cell-based therapies.