We previously isolated from a rat regenerating islet cDNA library a gene named Reg, which is expressed in regenerating islets but is not expressed in normal islets. Here we examined the effect of rat Reg protein on pancreatic beta-cell replication using both 90% depancreatized rats and isolated islets. The depancreatized rats that received i.p. administration of recombinant rat Reg protein (1 mg/kg per day) for 2 months showed amelioration of the surgical diabetes, as evidenced by a significant decrease in blood glucose with an increased beta-cell mass in the residual pancreas. In isolated rat islets, Reg protein (18-180 nM: 0.3-3 micrograms/ml) significantly increased [3H]thymidine incorporation into the nuclei of beta cells. These results indicate that Reg protein is a growth factor for pancreatic beta cells and also suggest that the administration of Reg protein could be used as another therapeutic approach for diabetes mellitus.