Although pancreatic exocrine acinar cells have the potential to transdifferentiate into pancreatic endocrine cells, the mechanisms are poorly understood. Here we report that intracellular signaling pathways, including those involving MAPK and PI3-kinase, are activated by enzymatic dissociation of pancreatic acinar cells, and that spherical cell clusters are formed by cadherin-mediated cell-cell adhesion during transdifferentiation. Inhibition of PI3-kinase by LY294002 prevents spheroid formation by degrading E-cadherin and -catenin, blocking transdifferentiation into insulin-secreting cells. In addition, neutralizing antibody against E-cadherin suppresses the induction of genes characteristic of pancreatic -cells. We also show that loss of cadherin-mediated cell-cell adhesion induces and maintains a dedifferentiated state in isolated pancreatic acinar cells. Thus, disruption and remodeling of cadherin-mediated cell-cell adhesion is critical in pancreatic exocrine-to-endocrine transdifferentiation, in which the PI3-kinase pathway plays an essential role.