Ac3IV (Ac-CYIQNCPRG-NH2) is an enzymatically stable vasopressin analogue that selectively activates Avpr1a (V1a) and Avpr1b (V1b) receptors. In the current study we have employed streptozotocin (STZ) diabetic transgenic Ins1Cre/+;Rosa26-eYFP and GluCreERT2;Rosa26-eYFP mice, to evaluate the impact of sustained Ac3IV treatment on pancreatic islet cell morphology and transdifferentiation. Twice-daily administration of Ac3IV (25 nmol/kg bw) to STZ-diabetic Ins1Cre/+;Rosa26-eYFP mice for 12 days increased pancreatic insulin (p<0.01) and significantly reversed the detrimental effects of STZ on pancreatic islet morphology. Such benefits were coupled with increased (p<0.01) beta-cell proliferation and decreased (p<0.05) beta-cell apoptosis. In terms of islet cell lineage tracing, induction of diabetes increased (p<0.001) beta- to alpha-cell differentiation in Ins1Cre/+;Rosa26-eYFP mice, with Ac3IV partially reversing (p<0.05) such transition events. Comparable benefits of Ac3IV on pancreatic islet architecture were observed in STZ-diabetic GluCreERT2;ROSA26-eYFP transgenic mice. In this model, Ac3IV provoked improvements in islet morphology which were linked to increased (p<0.05-p<0.01) transition of alpha- to beta-cells. Ac3IV also increased (p<0.05-p<0.01) CK-19 co-expression with insulin in pancreatic ductal and islet cells. Blood glucose levels were unchanged by Ac3IV in both models, reflecting the severity of diabetes induced. Taken together these data indicate that activation of islet receptors for V1a and V1b positively modulates alpha- and beta-cell turnover and endocrine cell lineage transition events to preserve beta-cell identity and islet architecture.