Three novel human insulin-releasing cell lines designated 1.1B4, 1.4E7, and 1.1E7 were generated by electrofusion of freshly isolated of human pancreatic beta cells and the immortal human PANC-1 epithelial cell line. Functional studies demonstrated glucose sensitivity and responsiveness to known modulators of insulin secretion. Western blot, RT-PCR, and immunohistochemistry showed expression of the major genes involved in proinsulin processing and the pancreatic beta cell stimulus-secretion pathway including PC1/3, PC2, GLUT-1, glucokinase, and K-ATP channel complex (Sur1 and Kir6.2) and the voltage-dependent L-type Ca(2+) channel. The cells stained positively for insulin, and 1.1B4 cells were used to demonstrate specific staining for insulin, C-peptide, and proinsulin together with insulin secretory granules by electron microscopy. Analysis of metabolic function indicated intact mechanisms for glucose uptake, oxidation/utilization, and phosphorylation by glucokinase. Glucose, alanine, and depolarizing concentrations of K(+) were all able to increase [Ca(2+)](i) in at least two of the cell lines tested. Insulin secretion was also modulated by other nutrients, hormones, and drugs acting as stimulators or inhibitors in normal beta cells. Subscapular implantation of the 1.1B4 cell line improved hyperglycemia and resulted in glucose lowering in streptozotocin-diabetic SCID mice. These novel human electrofusion- derived beta cell lines therefore exhibit stable characteristics reminiscent of normal pancreatic beta cells, thereby providing an unlimited source of human insulin-producing cells for basic biochemical studies and pharmacological drug testing plus proof of concept for cellular insulin replacement therapy.