A serially transplantable, chemically induced pancreatic islet cell tumor was developed in Lewis rats. The original tumor was induced by the administration of streptozotocin and nicotinamide. It was subsequently maintained by ip or sc transplantation of tissue fragments into recipient animals. Tumors generally grew to 0.5--2.0 cm in diameter within 3--4 months of transplantation. They were well encapsulated, without gross evidence of metastasis. Peroxidase immunocytochemical staining revealed a predominance of insulin-positive cells. Somatostatin-positive cells were also present and varied widely in numbers between different tumors. In addition, small numbers of glucagon-positive cells were observed in all of the tumors. On electron microscopy, cells containing secretory granules, indistinguishable from nonneoplastic beta-cells, were most abundant. Other granulated cells were also observed, but the granule morphology was not identical to that of any of the other classically described islet cell types. Tumor extracts contained an average of 3260 micrograms insulin, 22.6 micrograms somatostatin, and 0.84 micrograms glucagon per g wet wt of tissue. Tumors caused marked, progressive hypoglycemia in recipients, with plasma glucose levels frequently falling below 30 mg/dl before death. Furthermore, the recipients' islets were markedly reduced in size due to a decreased beta-cell volume.