Pancreatic islet amyloid deposits were found in 22 of 24 type-2 diabetic subjects (aged 48-68 years) and were not present in 10 age-matched controls. A novel peptide, 37 aminoacids long, termed diabetes-associated peptide (DAP), has been identified in amyloid-containing pancreatic extracts from 3 type-2 diabetic patients but not in extracts from 6 non-diabetic subjects. DAP has major homology with calcitonin-gene related peptide (CGRP) and the islet amyloid of all 22 diabetics showed CGRP immunoreactivity. The immunoreactivity was inhibited by preabsorption of three different CGRP antisera either with CGRP carboxyterminal peptide 28-37 or with extracted DAP. Both diabetic and non-diabetic subjects had CGRP/DAP immunoreactivity in islet B-cells. Electron microscopy of islets containing amyloid indicated fibrillar amyloid between the endocrine cells and capillaries, usually penetrating into deep invaginations of the plasma membrane of the B-cells. These results suggest that islet amyloid contains DAP, which may originate from B-cells. Accumulation of amyloid in islets is likely to impair islet function and may be a causal factor in the development of type-2 diabetes.