Existence of stem cells in adult pancreas remains contentious. Single cells suspensions obtained by collagenase and trypsin digestion separately from adult mouse pancreas and pancreatic islets were spun at 1000rpm (250g) to collect the cells. At this speed the stem/ progenitor cells remained buoyant and were further enriched by spinning the supernatant at 3000rpm (1000g). Two distinct populations of stem cells were detected including pluripotent, very small (2-6μm) embryonic-like stem cells (VSELs) that expressed nuclear OCT-4A and pluripotent transcripts (Oct-4A, Sox2, Nanog, Stella) and slightly bigger progenitors, pancreatic stem cells (PSCs) that expressed cytoplasmic OCT-4B and PDX-1. Streptozotocin treated diabetic pancreas showed an increase in numbers of VSELs (2-6μm, 7AAD-, LIN-CD45-SCA1+ cells) and up-regulation of transcripts specific for stem/ progenitor cells. Diabetic mice were further subjected to partial pancreatectomy to study involvement of VSELs/ PSCs during regeneration. VSELs/ PSCs were mobilized in large numbers, were observed in the lumen of blood vessels and PCNA expression suggested their proliferation. Initially, new acini assembled to regenerate the exocrine pancreas and later by Day 30, neogenesis of islets was observed in the vicinity of the blood vessels and pancreatic ducts by the differentiation of endogenous VSELs/ PSCs which may be targeted to regenerate diabetic pancreas in clinical settings.