Islet amyloid is a pathologic characteristic of the pancreas in type 2 diabetes comprised mainly of the beta-cell peptide islet amyloid polypeptide (IAPP; amylin). We used a pulse-chase approach to investigate the kinetics of processing and secretion of the IAPP precursor, proIAPP, in beta cells. By only 20 min after synthesis, a COOH-terminally processed proIAPP intermediate (approximately 6 kDa) was already present in beta cells. Formation of this NH2-terminally extended intermediate was not prevented by arresting secretory pathway transport at the trans-Golgi network (TGN) by either brefeldin A or temperature blockade, suggesting that this initial cleavage step occurs in the TGN before entry of (pro)IAPP into granules. Mature IAPP (approximately 4 kDa) was not detected until 60 min of chase, suggesting that NH2-terminal cleavage occurs in granules. Cells chased in low glucose without Ca2+ or with diazoxide, to block regulated release, secreted both proIAPP (approximately 8 kDa) and a partially processed form (approximately 6 kDa) via the constitutive secretory pathway. Stimulation of regulated secretion resulted in secretion primarily of mature IAPP as well as low levels of both unprocessed (approximately 8 kDa) and partially processed (approximately 6 kDa) proIAPP. We conclude that normal processing of proIAPP is a two-step process initiated by cleavage at its COOH terminus (likely by prohormone convertase 1/3 in the TGN) followed by cleavage at its NH2 terminus (by prohormone convertase 2 in granules) to form IAPP. Both proIAPP and its NH2-terminally extended intermediate appear to be normal secretory products of the beta cell that can be released via either the regulated or constitutive secretory pathways.