β cells, the insulin-producing cells lost in type I diabetes, were thought to reside only in the pancreas. Now, during detailed analysis of mouse livers, Dutton et al. (p. 239) have uncovered another source of β cells: the liver. The β cells are located within extra-hepatic bile ducts and have elevated levels of insulin mRNA, the proteolytically cleaved insulin C-peptide and insulin-containing secretory granules characteristic of pancreatic β cells. Furthermore, isolated hepatic ducts containing these β cells can secrete insulin in response to glucose. Using specific genetic markers to identify liver cells, the authors demonstrate that the β cells originate directly from liver epithelium rather than the pancreas. Attempts to replace or increase the number of β cells, in the treatment of type I diabetes have been hindered by the limited supply of pancreatic islets. The identification of this novel source of β cells offers renewed hope for the treatment of diabetes.