To determine whether improved metabolic control during the first two years of insulin-dependent diabetes (IDDM) modified beta cell function, we studied 108 subjects with recent-onset IDDM diagnosed between March 1986 and April 1992 and followed up prospectively for 2 years. Two insulin regimens were used: 1) conventional insulin treatment (CIT) (1986-90, n = 67) involving a mixture of regular and intermediate insulin before breakfast and dinner; and 2) intensive insulin treatment (IIT) (1990-92, n = 41) providing regular insulin before breakfast and lunch, and a mixture of regular and long-acting insulin before dinner. Glucagon-stimulated C-peptide was determined at diagnosis and at 3, 6, 12 and 24 months. Both groups had similar clinical, metabolic and immunological characteristics at diagnosis. The IIT group had better metabolic control at any given time-point after diagnosis (mean HbA1 during follow-up in CIT: 9.86 +/- 0.28%; IIT: 8.18 +/- 0.04%; p < 0.001) (normal < 9.0%). C-peptide was increased in the IIT group 3 and 6 months after diagnosis (month 0: 0.36 +/- 0.05 nmol/l; month 6: 0.55 +/- 0.06 nmol/l; p < 0.006), but not in the CIT group (month 0: 0.39 +/- 0.04 nmol/l; month 6: 0.45 +/- 0.04 nmol/l; p = NS). Two years after diagnosis, the IIT group maintained initial C-peptide secretion (2 years: 0.37 +/- 0.04 nmol/l) whereas C-peptide was reduced in the CIT group (2 years: 0.23 +/- 0.06 nmol/l) compared to the initial value (p < 0.001) or to that of the IIT group (p = 0.017). Thus, sustained improvement in metabolic control with IIT resulted in better beta-cell function during the first two years after IDDM diagnosis.