Replenishing insulin-producing pancreatic b cell mass will benefit both type I and type II diabetics. In adults, pancreatic b cells are generated primarily by self-duplication. We report on a mouse model of insulin resistance that induces dramatic pancreatic b cell proliferation and b cell mass expansion. Using this model, we identify a hormone, betatrophin, that is primarily expressed in liver and fat. Expression of betatrophin correlates with b cell proliferation in other mouse models of insulin resistance and during gestation. Transient expression of betatrophin in mouse liver significantly and specifically promotes pancreatic b cell proliferation, expands b cell mass, and improves glucose tolerance. Thus, betatrophin treatment could augment or replace insulin injections by increasing the number of endogenous insulin-producing cells in diabetics.