Type 1 diabetes (T1D) is characterized by the loss of insulin-producing β-cells in the pancreas. T1D can be treated using cadaveric islet transplantation, but this therapy is severely limited by a lack of donor pancreas. To develop an alternative cell therapy, we identified candidate cell populations through epigenetic characterization of multiple tissues. Chromatin conformation at the promoter region of key endocrine pancreatic genes was assessed using chromatin immunoprecipitation sequencing (ChIP-seq) and validation using promoter-specific TaqMan-based quantitative PCR (qPCR). Visceral fat was identified as a tissue retaining epigenetic signatures similar to those observed in the pancreas. Human adipose-derived mesenchymal cells were characterized using flow-cytometry, confocal microscopy, qPCR, in situ PCR and next generation sequencing technologies. We employed multiple transcription-factor-encoding adenoviruses (eg Pdx1, MafA, Ngn3) to determine the differentiation potential of these cells. Analysis of multiple pancreatic hormones and transcription factors in these samples demonstrated consistent differentiation. The differentiation potential was further explored using adipose-derived cells isolated from transgenic mice that express GFP under the regulation of Pdx1 (pancreatic and duodenal homeobox 1) or insulin-1 gene promoters. GFP expression was quantitated as an index of gene promoter activity during differentiation to insulin-producing cells. Human adipose-derived cells were exposed to similar conditions and seen to migrate to form islet-like cell aggregates, showing significant increases in islet hormone transcripts in vitro. These studies indicate that human adipose-derived cells can differentiate into insulin-producing cells in vitro and have potential for cell replacement therapy in diabetes.