Nociceptin (NC), also known as Orphanin FQ, is a brain peptide involved in the regulation of pain, but its role in the endocrine pancreas is poorly understood. The present study examines the pattern of distribution of NC and its effect on insulin and glucagon secretion after the onset of diabetes mellitus (DM). Male Wistar rats weighing 150-200 g were made diabetic with streptozotocin (60 mg/kg body weight, intraperitoneally). Four weeks after the induction of DM, pancreatic tissues were retrieved and processed for immunofluorescence, immunoelectron microscopy, and insulin and glucagon secretion. Isolated islets from non-diabetic and diabetic rats were used to determine the effect of NC on insulin release. NC was discerned in islet cells of non-diabetic control and diabetic rat pancreata. NC co-localized only with insulin in pancreatic beta cells. NC did not co-localize with either glucagon or somatostatin or pancreatic polypeptide. The number of NC-positive cells was markedly (p < 0.001) reduced after the onset of DM. Electron microscopy study showed that NC is located with insulin in the same secretory granules of the beta cells of both non-diabetic and diabetic rat pancreas. NC inhibits insulin release markedly (p < 0.05) from pancreatic tissue fragments of non-diabetic and diabetic rats. In contrast, NC at 10 M stimulates insulin release in isolated islets of DM rats. In conclusion, NC co-localizes with insulin only in the islet of Langerhans. The co-localization of NC with insulin suggests a role for NC in the regulation of pancreatic beta cell function.