Objective: Type I diabetes mellitus results from the autoimmune destruction of the β cells in pancreatic islets. Therefore, extensive research is going to generation of insulin-producing cells (IPCs) from stem cells. P19 embryonal carcinoma cells are multipotent and can differentiate into cell types of all three germ layers. In this study differentiation of P19 cells into IPCs by using mouse pancreas extract (MPE) was investigated Materials and Methods: In this study embryoid bodies (EBs) resulted of P19 cells were cultured in medium containing 3% fetal bovine serum, supplemented by concentration of 50, 100, 200,300 μg/mL MPE for 7-14 days. Dithizone (DTZ) staining was used to detect IPCs derived from EBs in vitro. Mouse monoclonal insulin-proinsulin and monoclonal insulin receptor beta antibodies used for immunoflourescence. Insulin content from the cells and secreted insulin by differentiated cells in response to concentrations of 5/5 and 25 mM Glucose were measured using ELISA kits. Results: DTZ-positive cells showed purple-red clusters. immunoflourescence indicated expression of Beta cell markers (insulin-proinsulin and insulin receptor beta) in these cells. The results indicated significantly increased insulin levels secretion by differentiated cells with high concentrations of MPE. These cells could respond to the increasing glucose of medium by increasing insulin secretion. These results indicated that P19 cells can serve as potential source of insulin-producing cells for transplantation therapy of type I diabetes mellitus. Conclusion: Our study suggests that these results indicated that P19 cells can serve as potential source of insulin-producing cells for transplantation therapy of type I diabetes mellitus.