Aims/hypothesis. A local angiotensin-generating system has been found in the exocrine pancreas. This study aimed, primarily, to investigate the existence of a local angiotensin-generating system in the pancreatic islets and, secondly, to elucidate its role in regulating insulin secretion. Methods. Real-time RT-PCR and western blot were used to investigate if angiotensin-generating components are present in the mouse pancreatic islets, which are subject to regulation by islet transplantation. The localisation of AT 1 -receptors in islets was investigated by immunohistochemistry. Batch-type incubations of isolated islets were applied for studying the influence of angiotensin II on the glucose-stimulated insulin release, glucose oxidation and (pro)insulin, and total protein biosynthesis. Results. Major components, namely angiotensinogen, ACE, AT 1 -and AT 2 -receptors, were expressed in endogenous islets. AT 1 -receptors were localised to pancreatic beta cells. Exposure of the isolated islets to angiotensin II induced a dose-dependent inhibition of glucose-stimulated insulin release and inhibited (pro)insulin biosynthesis. This inhibitory action was fully preventable by pretreatment of the islets with losartan, an AT 1 -receptor antagonist. We also investigated if the expression of these components was changed after islet transplantation. Notably, a markedly increased expression of mRNA for the AT 1 -receptor was observed in islets retrieved from 4-week-old syngeneic islet transplants, a finding that was confirmed at the protein level. Conclusion/interpretation. These data indicate the existence of an islet angiotensin-generating system of potential importance in the physiological regulation of glucose-induced insulin secretion, thus diabetes mellitus. The increased expression of the AT 1 -receptor in islet transplants could have relevance to islet-graft function. [Diabetologia (2004) 47:240-248]