The C-peptide of proinsulin is important for the biosynthesis of insulin but has for a long time been considered to be biologically inert. Data now indicate that C-peptide in the nanomolar concentration range binds specifically to cell surfaces, probably to a G protein-coupled surface receptor, with subsequent activation of Ca(2+)-dependent intracellular signaling pathways. The association rate constant, K(ass), for C-peptide binding to endothelial cells, renal tubular cells, and fibroblasts is approximately 3. 10(9) M(-1). The binding is stereospecific, and no cross-reaction is seen with insulin, proinsulin, insulin growth factors I and II, or neuropeptide Y. C-peptide stimulates Na(+)-K(+)-ATPase and endothelial nitric oxide synthase activities. Data also indicate that C-peptide administration is accompanied by augmented blood flow in skeletal muscle and skin, diminished glomerular hyperfiltration, reduced urinary albumin excretion, and improved nerve function, all in patients with type 1 diabetes who lack C-peptide, but not in healthy subjects. The possibility exists that C-peptide replacement, together with insulin administration, may prevent the development or retard the progression of long-term complications in type 1 diabetes.