Neonatal rats injected with streptozotocin (STZ, 100 mg/kg) at birth exhibit an acute diabetes that is characterized by a spontaneous and incomplete remission. The short- and long-term effect of exogenous insulin on the course of this neonatal diabetes has been studied. Insulin treatment (20 mU/g body wt./day, for 4 days) diminished the percentage of glycosuric animals on day 5 after birth (10%) as compared with the percentage in the non-insulin-treated diabetics (STZ) (67%). On the 14th day, the body weight and the pancreatic insulin content of insulin-treated animals (STZ + I) were significantly higher than the corresponding values in the STZ animals. Glucose tolerance tests performed sequentially indicated that from 21 days to 7 mo, the plasma insulin response in the (STZ + I) females was clearly increased as compared with that observed in the STZ group. However, it did not reach the insulin response of the controls except in the 21-day-old females and, as a function of age, it declined progressively at variance with the normal age-related pattern. These findings indicate that insulin treatment (sufficient to reduce daily glycosuria) applied during the overtly diabetic period markedly improved the recovery of the insulin stores in the pancreas. Moreover, the long-term effect of the treatment was a long lasting if not permanent improvement of the in vivo insulin response to glucose.