It has been asserted that exposure to 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) increases the risk for diabetes mellitus in humans, observable as hyperglycemia resulting from insulin resistance. There is no animal model for the induction of diabetes by TCDD. On the contrary, TCDD has been shown to increase insulin sensitivity in rats. Therefore, a diabetic rat model was used to study the effects of TCDD on preexisting diabetes. Type II diabetes was induced in male rats by a high-fat diet and streptozotocin. After manifestation of the disease, these rats received loading dose rates (LDRs) of 3.2, 6.4, and 12.8 microg/kg of TCDD p.o., followed by weekly maintenance dose rates. Rats fed a high-fat diet and not dosed with streptozotocin nor with TCDD served as nondiabetic controls. By day 2, serum-glucose levels in diabetic rats treated with the high LDR of 12.8 microg/kg TCDD were already significantly reduced. By day 8, serum-glucose levels had decreased to control levels and were maintained for the duration of the study (32 days). Thus, TCDD effectively counteracted hyperglycemia in this diabetic rat model. In healthy animals, TCDD induced PPAR gamma transcription and activity in a different dose range than that observed for the hypoglycemic effect.