An alternative approach to the treatment of type I diabetes is the use of genetically altered neoplastic liver cells to synthesize, store and secrete insulin. To try and achieve this goal we modified a human liver cell line, HUH7, by transfecting it with human insulin cDNA under the control of the cytomegalovirus promoter. The HUH7-ins cells created were able to synthesize insulin in a similar manner to that which occurs in pancreatic beta cells. They secreted insulin in a regulated manner in response to glucose, calcium and theophylline, the dose-response curve for glucose being near-physiological. Perifusion studies showed that secretion was rapid and tightly controlled. Removal of calcium resulted in loss of glucose stimulation while addition of brefeldin A resulted in a 30% diminution of effect, indicating that constitutive release of insulin occurred to a small extent. Insulin was stored in granules within the cytoplasm. When transplanted into diabetic immunoincompetent mice, the cells synthesized, processed, stored and secreted diarginyl insulin in a rapid regulated manner in response to glucose. Constitutive release of insulin also occurred and was greater than regulated secretion. Blood glucose levels of the mice were normalized but ultimately became subnormal due to continued proliferation of cells. Examination of the HUH7-ins cells as well as the parent cell line for beta cell transcription factors showed the presence of NeuroD but not PDX-1. PC1 and PC2 were also present in both cell types. Thus, the parent HUH7 cell line possessed a number of endocrine pancreatic features that reflect the common endodermal ancestry of liver and pancreas, perhaps as a result of ontogenetic regression of the neoplastic liver cell from which the line was derived. Introduction of the insulin gene under the control of the CMV promoter induced changes in these cells to make them function to some extent like pancreatic beta cells. Our results support the view that neoplastic liver cells can be induced to become substitute pancreatic beta cells and become a therapy for the treatment of type I diabetes.