Restoration of a functional beta-cell mass in a patient with diabetes may hold the key for curing the disease. In recent years, there has been increasing interest in the development of new strategies to induce beta-cell regeneration and new islet formation in situ and a role for Reg proteins has been suggested. One such protein, islet neogenesis associated protein (INGAP), is a member of the Reg3 family of proteins and has been shown to induce islet neogenesis. Elucidation of the mechanisms and factors involved in the regulation of expression of INGAP and related proteins is, therefore, of great importance. Here, we report the establishment of the first in vitro tissue model of INGAP expression that consists of epithelial cystic structures derived from hamster pancreatic acinar tissue cultured in collagen matrix. The objective of this study was to characterize INGAP expression in this model and to investigate the role of pro-inflammatory cytokines and growth factors. Using quantitative reverse transcriptase PCR, we show that INGAP expression correlates with cyst formation and size suggesting the involvement of intra-luminal pressure associated with cyst growth. We also demonstrate for the first time that INGAP gene expression was significantly induced by treatment with interleukin (IL)-6 and further enhanced by a combination of IL-6 with dexamethazone and nicotinamide. Additionally, our data suggest that the effect of IL-6 on INGAP expression is mediated via the JAK/STAT3 signaling pathway. In summary, the in vitro model of INGAP expression described here represents an important step in the development of strategies for the use of INGAP and related proteins as islet neogenic agents in the pharmacotherapy of both type-1 and type-2 diabetes.