Impaired islet function is a feature of non-insulin-dependent diabetes mellitus (NIDDM), which is manifested in part by disproportionate proinsulin release. A disproportionate increase in proinsulin also occurs in insulinomas, suggesting that enhanced proinsulin release results from an increase in synthesis and premature release of proinsulin-rich immature granules in both conditions. However, recent human and animal studies suggest that normal beta-cells respond to an increase in synthetic demand by enhancing their ability to process proinsulin. Thus, impaired processing of proinsulin is likely in NIDDM. A new point of similarity with insulinoma has been the demonstration of a novel pancreatic peptide isolated from insulinomas and the pancreas of patients with NIDDM. This peptide, named islet amyloid polypeptide or amylin, is also present in normal islets. Because of its association with two apparently dissimilar disease states, we propose a hypothesis that encompasses the observations related to proinsulin and islet amyloid polypeptide and suggest they are manifestations of the same abnormality. In this hypothesis, we suggest that this new pancreatic peptide is a normal participant in the process of proinsulin processing and storage. We also suggest that in the presence of defective proinsulin processing and insulin release, as occurs in NIDDM, hyperglycemia stimulates amylin biosynthesis so that this peptide is deposited in increased quantities in the islet as amyloid. This then further exacerbates the diabetic process, resulting in progressive hyperglycemia and deterioration in islet function.