We have recently shown that the diabetic syndrome in Psammomys obesus is characterized by severe depletion of islet immunoreactive insulin (IRI) stores together with a marked increase in the islet proinsulin to insulin ratio. In the present in vitro studies, we show marked enhancement of proinsulin biosynthesis in islets from diabetic P. obesus (approximately 8-fold compared to nondiabetic islets). Proinsulin to insulin conversion and insulin degradation do not differ significantly between diabetic and nondiabetic islets. The rate of IRI secretion at a stimulatory concentration of glucose (16.7 mM) is comparable in diabetic and nondiabetic animals, but at a nonstimulatory glucose concentration (0 mM), islets obtained from diabetic animals show significant IRI release. beta-Cells from diabetic P. obesus also exhibited increased secretion of newly synthesized proinsulin and conversion intermediates under stimulatory conditions. Moreover, a novel secretory compartment, highly enriched in newly synthesized C peptide, characterized the beta-cells of diabetic animals. Our data suggest that the marked insulin depletion observed in diabetic islets is probably due to a hyperglycemia-driven increase in secretory demand that is not met by the enhanced biosynthetic capacity of these islets. This leads to relative enrichment of the depleted diabetic islets with immature secretory granules of a higher proinsulin content.