The gene encoding proglucagon is expressed predominantly in the pancreas and intestine. The physiological importance of glucagon secreted from the islets of Langerhans has engendered considerable interest in the molecular control of proglucagon gene transcription in the endocrine pancreas. In contrast, little is known about the molecular control of proglucagon gene expression in the intestine. The recent demonstration that glucagon-like peptide-1 (GLP-1) secreted from the intestine is a potent regulator of insulin secretion and glucose homeostasis has stimulated renewed interest in the factors that control GLP-1 synthesis in the intestinal L-cell. To develop a model for the analysis of intestinal proglucagon gene expression, we have targeted expression of a proglucagon gene-simian virus-40 large T-antigen fusion gene to enteroendocrine cells in transgenic mice. These mice develop intestinal tumors that were used to derive a novel cell line, designated GLUTag, that expresses the proglucagon gene and secretes immunoreactive GLP-1 in vitro. GLUTag cells demonstrate morphological characteristics of enteroendocrine cells by electron microscopy and are plurihormonal, as shown by immunocytochemistry and RNA analyses. GLUTag cells express the proglucagon and cholecystokinin genes, consistent with the pattern of lineage-specific enteroendocrine differentiation described for mouse intestine. Proglucagon gene expression was induced by activators of the protein kinase-A pathway, and a combination of messenger RNA half-life and nuclear run-on experiments demonstrated that the protein kinase-A-induction is mediated by an increase in proglucagon gene transcription. In contrast, activators of protein kinase-C stimulated secretion, but not biosynthesis of the PGDPs in GLUTag cell cultures. Analysis of proglucagon processing in GLUTag cells demonstrated the liberation of glucagon, oxyntomodulin, glicentin, and multiple forms of GLP-1. These observations provide evidence for the direct induction of proglucagon gene transcription by a cAMP-dependent pathway and suggest that the GLUTag cell line represents a useful model for the analysis of the molecular determinants of enteroendocrine gene expression.