1. Degranulation of B-cells of rats infused with guinea-pig anti-insulin serum (AIS) for 3-4 hrs can be prevented completely by previous injection of diazoxide. Tolbutamide added to the AIS infusion abolishes the diazoxide effect on granule release. 2. Rats fed with 500 mg/kg diazoxide twice daily for 1-4 days show ultrastructural changes in the B-cells (multigranular sacs and granule-containing dense bodies). This suggests intracellular digestion of beta granules when granule release is blocked. Rats fed for 2 weeks with 500 mg/kg diazoxide twice daily show degranulated B-cells similar to those seen in long-term insulin treatment. Signs of intracellular digestion are still visible. These findings confirm the conclusion drawn from the physiological investigations that diazoxide inhibits insulin release from B-cells. They also add further information to our present knowledge of the mechanism of insulin storage and release. 1 Some of the results published in this paper have been presented previously at the 6th Congress of the International Diabetes Federation, Stockholm, July 1967 (Proc. 6. Congr. Int. Diab. Fed., Stockholm 1967, J. Östman, C.N. Hales Eds., Excerpta Med. Found., Amsterdam, in press) and at the 2nd Capri Conference on the ''Mechanism and Regulation of Insulin Secretion'' April 1968 (Acta Diabetologie Latina Vol. V, suppl. I, in press).