To produce insulin-producing cells (IPCs) from bone marrow mesenchymal stem cells (BM-MSCs) using a simple and cost effective method. During the initial 7 days of three-dimensional (3D) culture, BM-MSCs were cultured on 1% agar or agarose to form multicellular spheroids. Spheroids and spheroid-derived single cells (SS and SSC, respectively) were cultured in the absence of any proteinaceous growth factor in a simple specific medium for a further 7 d. The insulin content of the differentiated cells was evaluated at the mRNA and protein levels. Furthermore, the expression of pancreatic beta cells-related genes other than INS as well as the in vitro responses of IPCs to different glucose concentrations were investigated. Cellular clusters generated on agar and SS conditions (agar+SS-IPCs) stained better with beta cell specific stains and were more reactive to serum-containing insulin reactive antibodies compared with agarose-SS-IPCs. Gene expression analysis revealed that in comparison to agarose + SS-IPCs, agar+SS-IPCs expressed significantly higher levels of INS-1, INS-2, PDX-1, NKX6.1, andXBP-1. Of interest, agar+SSIPCs expressed 2215.3 ± 120.8-fold more INS-1 gene compared to BM-MSCs. The expression of β-cell associated genes was also higher in agar+SS-IPCs compared to the agar+SSC-IPCs. Moreover, the expression of INS-1 gene was significantly higher in agar+SS-IPCs compared with agar+SSC-IPCs after culture in media with high concentration of glucose. Compared to the most expensive and time-consuming protocols, 3D culture of MSCs on agar followed by 2D culture of cellular clusters in a minimally supplemented high glucose media produced highly potent IPCs which may pay the way to the treatment of diabetic patients.