The homeodomain transcription factor Pdx-1 has important roles in pancreas and islet development as well as in -cell function and survival. We previously reported that Pdx-1 overexpression stimulates islet cell proliferation, but the mechanism remains unclear. Here, we demonstrate that overexpression of Pdx-1 triggers proliferation largely by a non-cell-autonomous mechanism mediated by soluble factors. Consistent with this idea, overexpression of Pdx-1 under the control of a -cell-specific promoter (rat insulin promoter [RIP]) stimulates proliferation of both ␣ and  cells, and overexpression of Pdx-1 in islets separated by a Transwell membrane from islets lacking Pdx-1 overexpression activates proliferation in the untreated islets. Microarray and gene ontology (GO) analysis identified inhibin beta-B (Inhbb), an activin subunit and member of the transforming growth factor  (TGF-) superfamily, as a Pdx-1-responsive gene. Overexpression of Inhbb or addition of activin B stimulates rat islet cell and -cell proliferation, and the activin receptors RIIA and RIIB are required for the full proliferative effects of Pdx-1 in rat islets. In human islets, Inhbb overexpression stimulates total islet cell proliferation and potentiates Pdx-1-stimulated proliferation of total islet cells and  cells. In sum, this study identifies a mechanism by which Pdx-1 induces a soluble factor that is sufficient to stimulate both rat and human islet cell proliferation.T ype 1 and type 2 diabetes ultimately arise from loss of functional islet -cell mass (1-3). Islet transplantation and pharmaceutical activation of -cell regeneration have been considered strategies for treatment of these diseases, but both approaches are hindered by the lack of druggable pathways that reliably induce human -cell replication (4). Furthermore, factors that induce -cell growth must do so without altering key -cell functions, such as glucose-stimulated insulin secretion (GSIS), or causing cellular or DNA damage (5). For example, overexpression of cyclin D or cyclin-dependent kinase 6 (CDK6) induces human -cell proliferation with retention of function (6) but leads to DNA damage, as measured by staining for ␥-H2A member histone family member X (␥-H2AX) (5).Our laboratory has demonstrated that Pdx-1 and Nkx6.1, two homeobox domain transcription factors well known for key roles in islet -cell development, activate proliferation when overexpressed in rat or human islets while maintaining and enhancing GSIS, respectively (7-10). Importantly, the increase in proliferation induced by either factor has little to no impact on ␥-H2AX expression, suggesting that these factors engage "safe" pathways of islet cell replication. In adult islets, Pdx-1 expression is restricted to  and ␦ cells, and Nkx6.1 expression is restricted to  cells. Importantly, expression of these transcription factors is low or absent in nonislet cells, except in the central nervous system, suggesting that deeper knowledge of the molecular pathways that they activate might be an entrée to...