Generating an unlimited source of human insulin-producing cells is a prerequisite to advance β cell replacement therapy for diabetes. Here, we describe a 3D culture system that supports the expansion of adult human pancreatic tissue and the generation of a cell subpopulation with progenitor characteristics. These cells display high aldehyde dehydrogenase activity (ALDHhi), express pancreatic progenitors markers (PDX1, PTF1A, CPA1, and MYC), and can form new organoids in contrast to ALDHlo cells. Interestingly, gene expression profiling revealed that ALDHhi cells are closer to human fetal pancreatic tissue compared with adult pancreatic tissue. Endocrine lineage markers were detected upon in vitro differentiation. Engrafted organoids differentiated toward insulin-positive (INS+) cells, and circulating human C-peptide was detected upon glucose challenge 1 month after transplantation. Engrafted ALDHhi cells formed INS+ cells. We conclude that adult human pancreatic tissue has potential for expansion into 3D structures harboring progenitor cells with endocrine differentiation potential.