C3H.SW/SnJ females (haplotype H-2b) were mated with C3HeB/FeJ males (haplotype H-2k), which were heterozygous for the recessive mutation, diabetes (db). The object of the study was to analyze whether the H-2b haplotype conferred diabetes resistance to db/db males in the F2 generation. Severity of diabetes did not segregate with H-2 haplotype in this mouse model of diabetes. Instead, all F2 male mutants developed a much more severe diabetes syndrome than did "grandparental-type" C3HeB/FeJ-db/db males. Most surprisingly, unlike grandparental-type db/db females, which were uniformly resistant to the diabetogenic action of the db mutation, 75% of F2 db/db females developed severe diabetes. Ultrastructural comparison of beta cells in islets of these diabetic females versus those in the diabetes-resistant F2 mutants showed expression in the susceptible females of a type C retrovirus which budded extracellularly and intracellularly into vacuoles. No other islet endocrine cell type showed this expression, but intraislet exocrine cells as well as some ductal epithelial cells did produce type C particles. Macrophages were frequently observed in close association with the virus-expressing cell types. Failure of the diabetes acceleration factor(s) to segregate according to Mendelian expectations further suggested that type C retrovirus induction was linked to the accelerated pathogenesis of diabetes in the F2 generation.