To determine if increased local production of glucocorticoids by the pancreatic islets might play a role in the spontaneous noninsulin-dependent diabetes mellitus of obesity, we compared islet 11beta-HSD-1 mRNA and activity in islets of obese prediabetic and diabetic Zucker Diabetic Fatty (ZDF) (fa/fa) rats and lean wild-type (+/+) controls. In diabetic rat islets, both mRNA and enzymatic activity of the enzyme were increased in proportion to the hyperglycemia. Troglitazone (TGZ) treatment, beginning at 6 weeks of age, prevented the hyperglycemia, the hyperlipidemia, and the increase in 11beta-HSD-1. To determine if the metabolic abnormalities had caused the 11beta-HSD-1 increase, prediabetic islets were cultured in high or low glucose or in 2:1 oleate:palmitate for 3 days. Neither nutrient enhanced the expression of 11beta-HSD-1. We conclude that 11beta-HSD-1 expression and activity are increased in islets of diabetic, but not prediabetic ZDF rats, and that TGZ prevents both the increase in 11beta-HSD-1 and the diabetes.