In this study we have isolated and identified a progenitor cell population located in murine pancreatic tissue. This cell population has specific properties that make it different from previously described candidate pancreatic progenytor cell populations. It is located in the periductal region outside the islet architecture yet the cells have features consistent with endodermal development and endocrine functions within the islet. Cells are proliferative and capable of differentiation into pancreatic lineages expressing pancreatic associated transcription factors and proteins and maintaining the ability to produce insulin.