To clarify the regeneration process of pancreatic β-cells, we established a new mouse model of diabetes induced by selective perfusion of alloxan after clamping the superior mesenteric artery. In this model, diabetes could be induced by the destruction of β-cells in alloxan-perfused segments, while β-cells in nonperfused segments were spared. Intraperitoneal glucose tolerance tests showed glucose intolerance, which gradually ameliorated and was completely normalized in 1 year with a concomitant increase of insulin content in the pancreas. Histological examination showed neoislet formation in the alloxan-perfused segment and the proliferation of spared β-cells in the nonperfused segment. In the alloxan-perfused segment, despite a marked reduction of islets in size and number at an early stage, both the number of islets, including islet-like cell clusters (ICCs), and the relative islet area significantly increased at a later stage. Increased single β-cells and ICCs were located in close contact with duct cell lining, suggesting that they differentiated from duct cells and that such extra-islet precursor cells may be important for β-cell regeneration in β-cell–depleted segment. In addition to β-cells, some nonhormone cells in ICCs were positive for nuclear insulin promoter factor 1, which indicated that most, if not all, nonhormone cells positive for this factor were β-cell precursors. In the nonperfused segment, the islet area increased significantly, and the highest 5-bromo-2-deoxyuridine–labeling index in β-cells was observed at day 5, while the number of islets did not increase significantly. This indicated that the regeneration of islet endocrine cells occurs mostly through the proliferation of preexisting intra-islet β-cells in the nonperfused segment. In conclusion, the regeneration process of β-cells varied by circumstance. Our mouse model is useful for studying the mechanism of regeneration, since differentiation and proliferation could be analyzed separately in one pancreas.