In order to clarify insulinotropic effects of the myelin basic protein (MBP) we studied mode of association and distribution of MBP in the pancreatic islets and tested the insulin-releasing activity of various MBP peptides. Rat pancreatic islets were first stimulated in a static incubation with 10 μM bovine MBP (bMBP) at a substimulatory (3.5 mM) glucose concentration. The islets exposed to MBP released significantly more insulin and glucagon in a second incubation in the absence of added stimulant and in the presence of 11.5 mM arginine than the incubated, non-stimulated islets and islets initially stimulated with 15 mM glucose. Response to stimulation with 15 mM glucose in the second incubation by islets exposed first to MBP was impaired compared to incubated, non-stimulated islets. Immunoelectron microscopy showed that MBP had entered into the islet cells and associated with membranes of intracellular vacuoles, most of which represented enlarged, often fused insulin granules. MBP was also present at the islet edge and in the intercellular spaces. Of the purified MBP peptides of sizes of 4.8–13.6 kDa, produced from the digestion with brain acid proteinase and with pepsin and covering the entire bMBP sequence, only the large peptides (1–88, 9.8 kDa and 43–169, 13.6 kDa) stimulated insulin secretion significantly. Heterogeneous peptide mixtures, obtained from a time-course digestion of bMBP by myelin calcium-activated neutral protease, consisting of peptides of approximate molecular weights of 8–11 kDa and larger, also stimulated insulin release. The glucagon-releasing activity of MBP peptides was low and followed the same pattern as the insulin-releasing activity. The present results suggest that MBP-induced fusion of the membranes of hormone granules is involved in MBP-induced insulin release. The hormone-releasing activity of the large peptides in addition to that of the intact molecule is explained as being due to the ability of these peptides to associate with membranes. MBP-induced hormone release and related effects could be associated with neuropathological conditions such as stroke and multiple sclerosis.