Writing about their findings in the journal Cell, the researchers have revealed that the secret ingredient is a single transcription factor.
They have found that when the gene called Pax4 is forced on in pancreatic alpha cells, the cells change their identity to become beta cells.
The researchers say that the body then senses a loss of alpha cells, replaces them with new alpha cells, and then converts those too into beta cells.
According to them, a treatment based on their findings in mice may one day find its way to human patients.
However, Patrick Collombat of Inserm in France says: "A lot of ifs remain before we will know whether it could be taken to the clinic."
Some experts believe that even if the findings in mice translate to human tissue, scientists would need to find a way to turn Pax4 on and then back off again once a sufficient number of beta cells are in place.
Still, the findings hold considerable promise.
"The strategy we use is a good one. It's a new idea that we might use one factor. Normally, we would have thought it would take more," said Ahmed Mansouri of the Max-Planck Institute for Biophysical Chemistry in Germany.
The results also show that the pancreas is in general capable of such regeneration.
"It shows there are progenitors (in the pancreas) that can be activated," he said.
However, Mansouri admits that further studies are needed to show that the alpha to beta cell conversion can be kept under control.
"Too many beta cells isn't good either. We'll need a strategy to trigger Pax4 and, at a certain point, also stop it," he said.