The capacity of a fetal rat pancreas to grow and function was assessed after its transplantation into adult diabetic rats. One month after induction of diabetes by streptozotocin (SZ) (72.5 mg/kg) in adult Lewis rats, one syngeneic 17-17½ day fetal pancreas was transplanted under the kidney capsule. Insulin, initially 3 U/day and decreasing to 0.5 U every other day, was given for 27.5 ± 1.7 (× ± SEM) days (total dose, 48 ± 4 U) until the diabetes reversed (45 ± 3 days). Plasma glucose, 481 ± 10 mg/dl after SZ, fell after transplantation and cessation of insulin injections during a 4-mo period to 129 ± 2 mg/dl. Urine volume fell from 82 ± 4 ml per day to normal (12 ± 2), and glucose excretion, which was 7.7 ± 0.4 g per day after SZ, completely disappeared from the urine. The disappearance rate of glucose injected into the circulation, which was 0.50 ± 0.07% per minute in untreated diabetes, reverted to normal, 2.78 ± 0.18% per minute, not different from that in the normal control, 2.55 ± 0.13% per minute. Plasma insulin in control diabetic rats was totally unresponsive to glucose injection, despite a rise in plasma glucose concentration from 471 ± 5 mg/dl to 621 ±18 mg/dl. In transplanted rats, plasma insulin was moderately higher than normal before and at most time points after glucose injection. After removal of the transplanted pancreases, plasma glucose, urine volume, and glucose excretion returned to pretransplant levels and ketones appeared in the urine of all rats. Analysis of the insulin content of the pancreases removed 77 to 279 days after transplantation gave a value of 818 ± 43 mil, which is 22% of the insulin content of normal rats. To achieve optimal growth and function of a transplanted fetal pancreas, careful control of the blood glucose is necessary during the period of growth and development.