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 carboxy-terminal 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.