Streptozotocin (SZ) was given to 2-day-old neonatal rats, and, during their subsequent development, the interrelationships between plasma glucose, plasma insulin, pancreatic islet morphology, and hormone content were examined. At 4 days of age, a peak of hyperglycemia was observed (SZ, 349 ± 8 mg/dl versus control (C), 127 ± 2) that was associated with a marked reduction of B-cell numbers (SZ, 26.5 ± 2.6% B-cell per islet versus C, 72.8 ± 0.8%). By 10 days of age the SZ animals became normoglycemic with partial recovery of the B-cell number (SZ, 39.6 ± 2.1% versus C, 64.0 ± 2.6%). By 6 weeks hyperglycemia returned (SZ, 345 ± 5.2 mg/dl versus C, 171 ± 6.2) with B-cell number of the SZ being 72% of the C (SZ, 48.8 ± 2.4% versus C, 67.5 ± 1.5%). This hyperglycemia and reduced B-cell number persisted to at least 13 wk age. Despite a marked reduction of pancreatic insulin content observed during development, there was little effect upon glucagon or somatostatin content. At 6 wk of age, the plasma insulin concentration was only 30% of C, which suggests an insulin secretory defect beyond that which could be accounted for by the modest B-cell reduction. The present study indicates that even though active regeneration of B-celle occurred after early injury, the capacity for ultimate normalization was limited. The resultant moderate reduction in B-cell number may be associated with a functional defect in glucose-stimulated insulin secretion.