Postnatal maintenance or regeneration of pancreatic beta cells is considered to occur exclusively via the replication of existing beta cells, but clinically meaningful restoration of human beta cell mass by proliferation has never been achieved. We discovered a population of immature beta cells that is present throughout life and forms from non-beta precursors at a specialized micro-environment or "neogenic niche" at the islet periphery. These cells express insulin, but lack other key beta cell markers, and are transcriptionally immature, incapable of sensing glucose, and unable to support calcium influx. They constitute an intermediate stage in the transdifferentiation of alpha cells to cells that are functionally indistinguishable from conventional beta cells. We thus identified a lifelong source of new beta cells at a specialized site within healthy islets. By comparing co-existing immature and mature beta cells within healthy islets, we stand to learn how to mature insulin-expressing cells into functional beta cells.