Exercise improves glucose tolerance in obese rodent models and humans; however, effects with respect to mechanisms of beta-cell compensation remain unexplained. We examined exercise's effects during the progression of hyperglycemia in male Zucker diabetic fatty (ZDF) rats until 19 wk of age. At 6 wk old, rats were assigned to 1) basal--euthanized for baseline values; 2) exercise--swam individually for 1 h/day, 5 days/wk; and 3) controls (n = 8-10/group). Exercise (13 wk) resulted in maintenance of fasted hyperinsulinemia and prevented increases in fed and fasted glucose (P < 0.05) compared with sham-exercised and sedentary controls (P < 0.05). Beta-cell function calculations indicate prolonged beta-cell adaptation in exercised animals alone. During an intraperitoneal glucose tolerance test (IPGTT), exercised rats had lower 2-h glucose (P < 0.05) vs. controls. Area-under-the-curve analyses from baseline for IPGTT glucose and insulin indicate improved glucose tolerance with exercise was associated with increased insulin production and/or secretion. Beta-cell mass increased in exercised vs. basal animals; however, mass expansion was absent at 19 wk in controls (P < 0.05). Hypertrophy and replication contributed to expansion of beta-cell mass; exercised animals had increased beta-cell size and bromodeoxyuridine incorporation rates vs. controls (P < 0.05). The relative area of GLUT2 and protein kinase B was significantly elevated in exercised vs. sedentary controls (P < 0.05). Last, we show formation of ubiquitinated protein aggregates, a response to cellular/oxidative stress, occurred in nonexercised 19 wk-old ZDF rats but not in lean, 6 wk-old basal, or exercised rats. In conclusion, improved beta-cell compensation through increased beta-cell function and mass occurs in exercised but not sedentary ZDF rats and may be in part responsible for improved glucoregulation.