The pancreatic processing enzymes, PC1 and PC2, convert proinsulin to insulin and convert proglucagon to glucagon and glucagon-like peptide 1 (GLP-1). We examined the effect of streptozotocin (STZ) treatment on the regulation of these enzymes and the production of insulin, glucagon, and GLP-1 in the rat. Pancreatic PC1 and PC2 mRNA increased >2-fold and >4-fold, respectively, in rats receiving intraperitoneal STZ (50 mg/kg) daily for 5 days. Immunocytochemistry revealed that, although pancreatic islet cells in the STZ-treated rats were sparse and atrophic PC1, PC2, glucagon, and GLP-1 immunoreactivity increased dramatically in the remaining islet cells. Heightened PC1 and PC2 expression was seen in cells expressing glucagon but not in insulin-expressing cells. Furthermore, in STZ-treated rats, bioactive GLP-1(7-36 amide) accumulated in pancreatic extracts and serum 3- and 2.5-fold, respectively, over control animals. This treatment also caused a 2-fold increase in the ratio of amidated forms of GLP-1 immunoreactivity to total glucagon immunoreactivity in the pancreas but did not affect the ratio of proinsulin to insulin. We conclude that hyperglycemic rats have an increased expression of prohormone converting enzymes in islet alpha cells, leading to an increase in amidated GLP-1, which can then exert an insulinotropic effect on the remaining beta cells.