One week of treatment with EGF and gastrin (EGF/G) was shown to restore normoglycemia and to induce islet regeneration in mice treated with the diabetogenic agent alloxan. The mechanisms underlying this regeneration are not fully understood. We performed genetic lineage tracing experiments to evaluate the contribution of beta cell neogenesis in this model. One day after alloxan administration, mice received EGF/G treatment for one week. The treatment could not prevent the initial alloxan-induced beta cell mass destruction, however it did reverse glycemia to control levels within one day, suggesting improved peripheral glucose uptake. In vitro experiments with C2C12 cell line showed that EGF could stimulate glucose uptake with an efficacy comparable to that of insulin. Subsequently, EGF/G treatment stimulated a 3-fold increase in beta cell mass, which was partially driven by neogenesis and beta cell proliferation as assessed by beta cell lineage tracing and BrdU-labeling experiments, respectively. Acinar cell lineage tracing failed to show an important contribution of acinar cells to the newly formed beta cells. No appearance of transitional cells co-expressing insulin and glucagon, a hallmark for alpha-to-beta cell conversion, was found, suggesting that alpha cells did not significantly contribute to the regeneration. An important fraction of the beta cells significantly lost insulin positivity after alloxan administration, which was restored to normal after one week of EGF/G treatment. Alloxan-only mice showed more pronounced beta cell neogenesis and proliferation, even though beta cell mass remained significantly depleted, suggesting ongoing beta cell death in that group. After one week, macrophage infiltration was significantly reduced in EGF/G-treated group compared to the alloxan-only group. Our results suggest that EGF/G-induced beta cell regeneration in alloxan-diabetic mice is driven by beta cell neogenesis, proliferation and recovery of insulin. The glucose-lowering effect of the treatment might play an important role in the regeneration process.