It has generally proven challenging to produce functional β cells in vitro. Here, we describe a previously unidentified protein C receptor positive (Procr+) cell population in adult mouse pancreas through single-cell RNA sequencing (scRNA-seq). The cells reside in islets, do not express differentiation markers, and feature epithelial-to-mesenchymal transition characteristics. By genetic lineage tracing, Procr+ islet cells undergo clonal expansion and generate all four endocrine cell types during adult homeostasis. Sorted Procr+ cells, representing ∼1% of islet cells, can robustly form islet-like organoids when cultured at clonal density. Exponential expansion can be maintained over long periods by serial passaging, while differentiation can be induced at any time point in culture. β cells dominate in differentiated islet organoids, while α, δ, and PP cells occur at lower frequencies. The organoids are glucose-responsive and insulin-secreting. Upon transplantation in diabetic mice, these organoids reverse disease. These findings demonstrate that the adult mouse pancreatic islet contains a population of Procr+ endocrine progenitors.