Two of the unanswered questions in mammalian developmental biology are when and where the fate of the germ cell is specified. Here, we report that stem cells isolated from the skin of porcine fetuses have the intrinsic ability to differentiate into oocyte-like cells. When differentiation was induced, a subpopulation of these cells expressed markers such as Oct4, Growth differentiation factor 9b (GDF9b), the Deleted in Azoospermia-like (DAZL) gene and Vasa - all consistent with germ-cell formation. On further differentiation, these cells formed follicle-like aggregates that secreted oestradiol and progesterone and responded to gonadotropin stimulation. Some of these aggregates extruded large oocyte-like cells that expressed oocyte markers, such as zona pellucida, and the meiosis marker, synaptonemal complex protein 3 (SCP3). Some of these oocyte-like cells spontaneously developed into parthenogenetic embryo-like structures. The ability to generate oocyte-like cells from skin-derived cells may offer new possibilities for tissue therapy and provide a new in vitro model to study germ-cell formation and oogenesis.