Expression under the control of the mouse transferrin promoter of a transgene encoding a soluble secreted derivative of the ectodomain of the human insulin receptor in transgenic mice results in the accumulation of this high-affinity insulin-binding protein in the plasma. Alterations of glucose homeostasis are observed including postabsorptive hyperglycemia concomitant with increased hepatic glucose production and hyperinsulinemia. Thus, this is the first transgenic animal model of chronic hyperglycemia with alterations in glucose homeostasis that are produced without a targeted alteration of pancreatic function. These mice provide a new experimental model to follow the progression and long-term consequences of chronic hyperglycemia.