Transgenic mice expressing the P-enolpyruvate carboxykinase (PEPCK)/human insulin chimeric gene have been obtained as a model to study the feasibility of gene therapy for diabetes. These transgenic animals were healthy and normoglycemic and expressed human insulin in a physiologically regulated manner, mainly in the liver. Streptozotocin-treated transgenic mice had high levels of human insulin immunoreactivity in serum and showed a significant decrease (up to 40%) in glycemia compared with streptozotocin-treated control mice. The expression of genes involved in liver glucose metabolism, such as glucokinase, pyruvate kinase, and PEPCK, which is markedly altered by diabetes, was significantly recovered in transgenic mice treated with streptozotocin. In addition, the activity of both glucokinase and glycogen synthase, and the content of glucose 6-phosphate and glycogen, were normal in the liver, even when transgenic animals were treated with diabetogenic doses of streptozotocin. These results constitute an indication in vivo that diabetes gene therapy is possible, by means of the production of insulin in extrapancreatic tissues.