It has been shown that combined high local hyperinsulinism and hyperglycemia after low-number islet transplantation into the livers of streptozotocin-diabetic rats lead to the development of hepatocellular neoplasms but a substantial cocarcinogenic effect of genotoxic streptozotocin could not be ruled out completely. Thus, we herein investigated this model in BB/Pfd rats (n = 805; nine experimental groups), which develop spontaneous autoimmune diabetes similar to human type 1 diabetes. After low-number islet transplantation (n = 450), the liver acini downstream of the islets show insulin-induced alterations: massive glycogen and/or fat accumulation, translocation of the insulin receptor, decrease in glucose-6-phosphatase activity, increase in expression of insulin-like growth factor (IGF)-I, IGF-II/mannose-6-phosphate receptor, insulin receptor substrate-1, Raf-1, and Mek-1, corresponding to clear cell preneoplastic foci of altered hepatocytes known from chemical hepatocarcinogenesis and identical to that in streptozotocin-diabetic Lewis rats. After 6 months, many altered liver acini progressed to other types of preneoplasias often accompanied by an overexpression of the glutathione-S transferase (placental form), IGF-I receptor, and transforming growth factor (TGF)-alpha. After 12 to 15 and 15 to 18 months, 52% and 100% of the animals showed one or multiple hepatocellular adenomas or hepatocellular carcinomas (HCCs), respectively. Conclusively, this study identifies combined hyperinsulinism and hyperglycemia as a carcinogenic mechanism for the development of HCCs in diabetic rats. Hepatocarcinogenesis is independent from additional genotoxic compounds (i.e., streptozotocin), but is primarily triggered by increased intracellular insulin signaling via pathways associated with cell growth and proliferation, such as the Ras-Raf-mitogen-activated protein kinase pathway and the IGF system, and secondarily involves other growth factors, such as TGF-alpha.