Impairment of insulin secretion due to prolonged hyperglycemia is believed to contribute to the manifestation of diabetes mellitus, often referred to as glucose toxicity of pancreatic beta cells. In addition, impaired beta cell function has been associated with elevated islet triglyceride content (lipotoxicity). Impaired functions of the transactivating factors islet duodenum homeobox-1 (IDX-1) and RIPE3b-binding proteins have been implicated in the pathological downregulation of insulin gene transcription by high glucose levels in pancreatic beta cell lines in vitro, and, similarly, the exposure of pancreatic islets to fatty acids decreases IDX-1 expression. Previously, we identified the basic leucine zipper transcription factor CCAAT/enhancer-binding protein beta (C/ EBPbeta) as an inhibitor of insulin gene transcription in pancreatic beta cells and showed that the expression of C/EBPbeta is upregulated in insulinoma-derived beta cell lines by sustained high glucose concentrations. Here we describe the regulation of the expression of IDX-1, C/EBPbeta, and insulin at the mRNA and protein levels in pancreatic islets in animal models of diabetes mellitus. Concomitant with a downregulation of IDX-1 and insulin expression, C/EBPbeta is upregulated in association with the manifestation of hyperglycemia during the development of diabetes in the Zucker diabetic fatty (fa/fa) rat and in the 90% pancreatectomy rat model of diabetes. This regulation is demonstrated to influence both the amount of cellular protein and the level of steady state messenger RNA. Our findings indicate that the differential dysregulation of both IDX-1 and C/EBPbeta, in response to sustained hyperglycemia or hyperlipidemia, may be involved in the impairment of insulin gene expression during the manifestation of diabetes mellitus.