Insulin gene therapy requires that insulin secretion be coupled to metabolic requirements. To this end, we have developed an insulin transgene whose transcription is stimulated by glucose and inhibited by insulin. Glucose- and insulin-sensitive promoters were constructed by inserting glucose-responsive elements (GlREs) from the rat L-pyruvate kinase (L-PK) gene into the insulin-sensitive, liver-specific, rat insulin-like growth factor binding protein-1 (IGFBP-1) promoter. Glucose (5 to 25 mM) stimulated, and insulin (10-10 to 10-7 M) inhibited, luciferase expression driven by these promoters in primary cultured rat hepatocytes. The capacity of transfected hepatocytes to secrete mature, biologically active insulin was demonstrated using a human proinsulin cDNA (2xfur), modified to allow protein processing by endogenous endopeptidase activity. Medium conditioned by insulin-producing hepatocytes contained greater than 300 microU/ml immunoreactive insulin, while denaturing SDS-PAGE of an anti-insulin immunoprecipitate revealed bands with the mobilities of insulin A, and B chains. Biological activity of hepatocyte-produced insulin was demonstrated in a transfection assay, in which medium conditioned by insulin-producing hepatocytes exerted an effect similar to 10-7 M insulin. We then combined the glucose- and insulin-sensitive promoter with the modified human proinsulin cDNA to create a metabolically sensitive insulin transgene ((GlRE)3BP-1 2xfur). In both H4IIE hepatoma cells stably transfected with this construct, and normal rat hepatocytes (GlRE)3BP-1 2xfur-mediated insulin secretion increased in response to stimulation by glucose. Moreover, a capacity to decrease insulin production in response to diminishing glucose exposure was also demonstrated. We conclude that the transcriptional regulation of insulin production using these glucose- and insulin-sensitive constructs meets the requirements for application in a rodent model of insulin gene therapy. Gene Therapy (2000) 7, 205-214.