Phenotypic plasticity is a phenomenon that describes the occurrence of 2 or more distinct phenotypes under diverse conditions. This article discusses the work carried out over the past few years in understanding the potential of human pancreatic islet-derived progenitors for cell replacement therapy in diabetes. The phenotypic plasticity exhibited by pancreatic progenitors during reversible epithelial-to-mesenchymal transition (EMT) and possible role of microRNAs in regulation of this process is also presented herein.