Regeneration-competent species possess the ability to reverse the progression of severe diseases by restoring the function of the damaged tissue. However, the cellular dynamics underlying this capability remain unexplored. Here, we have used single-cell transcriptomics to map de novo β-cell regeneration during induction and recovery from diabetes in zebrafish. We show that the zebrafish has evolved two distinct types of somatostatin-producing δ-cells, which we term δ1- and δ2-cells. Moreover, we characterize a small population of glucose-responsive islet cells, which share the hormones and fate-determinants of both β- and δ1-cells. The transcriptomic analysis of β-cell regeneration reveals that β/δ hybrid cells provide a prominent source of insulin expression during diabetes recovery. Using in vivo calcium imaging and cell tracking, we further show that the hybrid cells form de novo and acquire glucose-responsiveness in the course of regeneration. The overexpression of dkk3, a gene enriched in hybrid cells, increases their formation in the absence of β-cell injury. Finally, interspecies comparison shows that plastic δ1-cells are partially related to PP cells in the human pancreas. Our work provides an atlas of β-cell regeneration and indicates that the rapid formation of glucose-responsive hybrid cells contributes to the resolution of diabetes in zebrafish.