To develop transplantable beta-cell lines for the treatment of diabetes mellitus, we have taken advantage of the property of INS-1 cells to synthesize and secrete not only insulin, but also small quantities of the insulinotropic hormone glucagon-like peptide-1 (GLP-1). In INS-1 cells over-expressing the beta-cell GLP-1 receptor (GLP-1-R), we have shown, by radioimmune assay and bioassay of conditioned medium, that an autocrine signaling mechanism of hormone action exists whereby self-secreted GLP-1 acts as a competence factor in support of insulin gene transcription. INS-1 cells also exhibit insulin gene promoter activity, as assayed in cells transfected with a rat insulin gene I promoter-luciferase construct (RIP1-Luc). The GLP-1-R agonist exendin-4 stimulates RIP1-Luc activity in a glucose-dependent manner, an effect mediated by endogenous GLP-1-Rs, and is blocked by the serine/threonine protein kinase inhibitor Ro 31-8220. Over-expression of GLP-1-R in transfected INS-1 cells reduces the threshold for exendin-4 agonist action, whereas basal RIP1-Luc activity increases 2.5-fold in the absence of added agonist. The increase of basal RIP1-Luc activity is a consequence of autocrine stimulation by self-secreted GLP-1 and is blocked by introduction of (1) an inactivating W39A mutation in the N-terminus ligand-binding domain of GLP-1-R or (2) mutations in the third cytoplasmic loop that prevent G protein coupling. No evidence for constitutive ligand-independent signaling properties of the GLP-1-R has been obtained. Over-expression of GLP-1-R increases the potency and efficacy of D-glucose as a stimulator of RIP1-Luc. Thus, INS-1 cells over-expressing the GLP-1-R recapitulate the incretin hormone effect of circulating GLP-1, thereby providing a possible strategy by which beta-cell lines may be engineered for efficient glucose-dependent insulin biosynthesis and secretion.