Tolbutamide stimulates postnatal neogenesis of the islets of Langerhans as demonstrated by enumeration of the islets, in vivo studies and radioautography. This drug first causes transient dilatation of insular vessels and rapid blood flow, followed by de granulation of the beta cells. Reappearance of granules, proliferation of the small pancreatic ducts, formation of new islets and an increased number of small islets occur during chronic administration of tolbutamide. The implications of these findings for the management of juvenile diabetes are discussed. DIABETES 15:597-603, August, 1966.