Backgroung: Diabetes is the eleventh most important cause of premature mortality in Egypt, typically affects children and young adults, and is responsible for 2.4% of all years of life lost (YLL) and it is the sixth most important cause of disability burden in Egypt (National Center of Health and Population,2004). Objective: To assess the expansion and propagation efficiency of adipose tissue- derived human mesenchymal stem cells in invitro culture. And to evaluate the ability of adipose tissue- derived human mesenchymal stem cells to differentiate into cells expressing human insulin gene without any kind of genetic modification.Methods: Mesenchymal stem cells of human adipose tissue were isolated, expanded, passaged, and tested for its characters, then induced to be differentiated into insulin secreting cells.Results: Cells isolated from adipose tissue changed in morphology to fusiform adherent cells starting from day 5 after culture, and expressed several stem cell markers, such as CD44, CD105, but did not express CD45. AT-MSCs also expressed CD34, a hematopoietic surface marker CD34, a fact that opposed the minimal criteria that were proposed by international society for cellular therapy. As other stem cells, hAT-MSCs had potential to self renewal and induce differentiation into cells of mesodermal lineage. Differentiation of hAT-MSCs into islet-like cells was assessed, first by observation of morphological changes, as at initial days after culture, morphology of hAT-MSCs changed from fusiform to round, clustered, and developed half-suspendedly cells. Also the expression of insulin genes in induced human AT-MSCs was confirmed by RT-PCR( amplified product 192 bps in length), and immunohistochemistry by using intracytoplasmic insulin CD marker. Furthermore, these differentiated AT-MSCs were shown to secrete insulin, confirmed by radioimmunoassay ( 0.1-0.4 μU/ml).