Mesenchymal stem cell is a potent tool for regenerative medicine against control of incurable diseases in human and animals. Diabetes mellitus is one such condition marked with the blood glucose is high due to lack of insulin (INS) hormone secreted by the pancreatic cells. Rare, but sporadic, cases of dysfunctional pancreatic cells in goat as well as the promises of stem cell therapy as an off-the-shelf medicine prompted us to explore the potential of adipose-derived goat mesenchymal stem cells (AD-MSCs) to transdifferentiate into pancreatic islet-like cells. We isolated, in vitro cultured, and characterized the AD-MSCs by expression of MSC-specific markers and differentiation into multiple mesodermal lineage cells. The characterized AD-MSCs were in vitro transdifferentiated into INS-producing islet-like cells using a cocktail of glucose, nicotinamide, activin-A, exendin-4, pentagastrin, retinoic acid, and mercaptoethanol in 3 weeks. The transdifferentiated islet-like cells demonstrated the expression of pancreatic endoderm-specific transcripts PDX1, NGN3, PAX6, PAX4, ISL1, and GLUT2 as well as protein expression of pancreatic and duodenal homeobox 1 (PDX1), INS, and Islets 1 (ISL1). The islet-like cells also demonstrated the significant glucose-dependent INS release with respect to the course of transdifferentiation regime. The study envisaged to create the building material for basic research into mechanism of glucose homeostasis, which may pave road for developments in diabetes drug discovery and regenerative therapies.