--- - |2- Abstract Pancreatic progenitors have been explored for their profound characteristics and unique commitment to generate new functional islets in regenerative medicine. Pancreatic resident endocrine progenitors (PREPs) with mesenchymal stem cell (MSC) phenotype were purified from BALB/c mice pancreas and characterized. PREPs were differentiated into mature islet clusters in vitro by activin‐A and swertisin and functionally characterized. A temporal gene and protein profiling was performed during differentiation. Furthermore, PREPs were labeled with green fluorescent protein (GFP) and transplanted intravenously into streptozotocin (STZ) diabetic mice while monitoring their homing and differentiation leading to amelioration in the diabetic condition. PREPs were positive for unique progenitor markers and transcription factors essential for endocrine pancreatic homeostasis along with having the multipotent MSC phenotype. These cells demonstrated high fidelity for islet neogenesis in minimum time (4 days) to generate mature functional islet clusters (shortest reported period for any isolated stem/progenitor). Furthermore, GFP‐labeled PREPs transplanted in STZ diabetic mice migrated and localized within the injured pancreas without trapping in any other major organ and differentiated rapidly into insulin‐producing cells without an external stimulus. A rapid decrease in fasting blood glucose levels toward normoglycemia along with significant increase in fasting serum insulin levels was observed, which ameliorated the diabetic condition. This study highlights the unique potential of PREPs to generate mature islets within the shortest period and their robust homing toward the damaged pancreas, which ameliorated the diabetic condition suggesting PREPs affinity toward their niche, which can be exploited and extended to other stem cell sources in diabetic therapeutics. - Journal of Cellular Physiology, EarlyView.