Pancreatic neuroendocrine tumors (PanNET) comprise two molecular subtypes, relatively benign islet tumors (IT) and invasive, metastasis-like primary (MLP) tumors. Until now, the origin of aggressive MLP tumors has been obscure. Herein, using multi-omics approaches, we revealed that MLP tumors arise from IT via dedifferentiation following a reverse trajectory along the developmental pathway of islet β cells, which results in the acquisition of a progenitor-like molecular phenotype. Functionally, the miR-181cd cluster induces the IT-to-MLP transition by suppressing expression of the Meis2 transcription factor, leading to upregulation of a developmental transcription factor, Hmgb3. Notably, the IT-to-MLP transition constitutes a distinct step of tumorigenesis and is separable from the classic proliferation-associated hallmark, temporally preceding accelerated proliferation of cancer cells. Furthermore, patients with PanNET with elevated HMGB3 expression and an MLP transcriptional signature are associated with higher-grade tumors and worse survival. Overall, our results unveil a new mechanism that modulates cancer cell plasticity to enable malignant progression. SIGNIFICANCE: Dedifferentiation has long been observed as a histopathologic characteristic of many cancers, albeit inseparable from concurrent increases in cell proliferation. Herein, we demonstrate that dedifferentiation is a mechanistically and temporally separable step in the multistage tumorigenesis of pancreatic islet cells, retracing the developmental lineage of islet β cells.This article is highlighted in the In This Issue feature, p. 2355.