The therapeutic potential of stem cells has led to renewed interest in regenerative biology. Pancreatic stellate cells have been reported in the mammalian pancreas; however, there are very few reports on stellate cells in the chicken pancreas. The intercalated duct epithelial cells observed in the A and B islets of the chicken pancreas have been claimed to be stellate cells from their morphological appearance. While isolating islets and acinar cells from the chick pancreas, we have found a population of stellate-like cells, which has been successfully propagated in a defined nutrient medium. These cells were immunopositive for vimentin, desmin, and fibronectin and also expressed alkaline phosphatase, indicating their undifferentiated state. On exposure to serum-free medium containing specific nutrients and differentiating agents, these stellate-like-cells gave rise to islet-like cell clusters. Islet-like clusters stained positive for the islet specific stain diphenyl thiocarbazone and were immunopositive for C-peptide indicating de novo insulin synthesis. These clusters secreted insulin in response to glucose challenge, thus suggesting their similarity to islets. Thus stellate cells found in chick pancreatic islets exhibit potential to differentiate into islet-like clusters. Taken together, our study documents for the first time the presence of a stellate-like cell population in chick pancreatic islets providing a source for islet neogenesis.