Transdifferentiation, also known as lineage reprogramming, was first discovered by Selman and Kafatos in 1974 in silkmoths. They observed that the moths’ cuticle-producing cells transformed into salt-producing cells. Many such cases of natural transdifferentiation occur in organisms. In humans, pancreatic alpha cells can become beta cells. In newts, the loss of the eye’s lens causes the pigmented epithelial cells to transdifferentiate into the lens cells.

Artificial transdifferentiation occurs when a transcription factor is forced to be expressed in a mature cell type. Therapeutically, turning on the transcription factor, MyoD converts human fibroblasts into muscle cells. Another transcription factor, C/EBP α, transforms mature lymphocytes into macrophages. In rats, the chemical dexamethasone turns on the expression of a transcription factor, C/EBP β, to convert pancreatic exocrine cells into liver cells. This transdifferentiation likely occurs since both pancreatic and liver cells originate from neighboring regions of the endoderm during development. The reverse of this differentiation, i.e., conversion of liver cells into pancreatic exocrine cells, is also experimentally possible.

Transdifferentiation of cells does not go through an intermediate pluripotent stem cell state; therefore, it has some advantages over differentiating cells from induced pluripotent stem cells (iPSCs). Some epigenetic marks must be removed while transdifferentiating cells, while all the epigenetic marks are erased while reprogramming iPSCs. Mutations are less likely to occur when cells directly transform from one mature type to another.