Low levels of hepatic insulin production have been shown to prevent lethal ketoacidosis associated with type 1 diabetes. To assess the beneficial effects of sustained hepatic production of insulin on glycemic control in type 1 diabetes, we have employed the adenovirus-mediated gene delivery system to transfer an engineered rat preproinsulin gene to the livers of streptozotocin-induced diabetic nude rats. Hepatic insulin production resulted in the reduction of blood glucose in treated diabetic rats, the degree of blood glucose reduction correlated with both the vector dose and the level of hepatic insulin expression. At moderate vector doses, 0.3-0.7 ng/ml of plasma insulin was produced in treated diabetic animals, resulting in significant reduction of nonfasting hyperglycemia and improvement in glucose tolerance. Furthermore, these animals maintained euglycemia after 12-h fast. At higher vector doses, greater than 1 ng/ml of plasma insulin was produced, completely reversing nonfasting hyperglycemia in treated rats. However, all of the treated animals developed severe hypoglycemia upon fasting. This study has defined the maximal tolerable level of hepatic insulin production that is sufficient to reduce the degree and ameliorate the adverse effects of nonfasting hyperglycemia without risk of fasting hypoglycemia in type 1 diabetic rats.