Pancreatic islets contain three major cell types: α-cells that secrete glucagon, β-cells that generate insulin and δ-cells that generate somatostatin. It is known that regeneration-competent species, such as zebrafish, can restore sugar homeostasis even after significant β-cell ablation, providing insights into potential therapies for diabetes. However, our understanding of the processes underlying β-cell regeneration is limited. Here, Nikolay Ninov and colleagues provide a single-cell atlas of de novo β-cell regeneration in adult zebrafish and uncover a population of hybrid β/δ-cells that can contribute to diabetes recovery. They first show that zebrafish contain two types of δ-cells, which they term δ1- and δ2-cells, each expressing different somatostatin paralogues. They further report that a subset of islet cells exhibits a hybrid β/δ1 identity; these cells, which persist from the early stages of development through to adulthood, express β- and δ-cell identity genes and are glucose responsive. Following this, the researchers show that hybrid cells increase in number and contribute to insulin expression following β-cell ablation. Moreover, live-cell tracking reveals that hybrid cells arise de novo during β-cell regeneration. Finally, the researchers report that overexpression of the secreted protein Dkk3b can increase hybrid cell formation in the absence of injury. Together, these findings uncover an intermediate-lineage population that can contribute to the resolution of diabetes in zebrafish.