Rat hepatoma cells were engineered to express, in a regulated manner, mature human insulin as an approach to the development of artificial beta-cells for insulin-dependent diabetes mellitus (IDDM) gene therapy. A chimeric gene obtained by linking a 2.4-kb fragment of the P-enolpyruvate carboxykinase (PEPCK) gene promoter to a human proinsulin gene (PEPCK/Insm), containing genetically engineered furin endoprotease cleavage sites, was stably transfected into FTO-2B rat hepatoma cells. The FTOInsm cells expressed high levels of insulin mRNA and protein after Northern blot or immunocytochemical analysis. High-performance liquid chromatography (HPLC) fractionation of culture medium and cell extracts revealed that about 90% of the proinsulin was processed to mature insulin. Insulin secretion was very fast, and 15 min after induction with dibutyryl cyclic AMP (Bt2cAMP) plus dexamethasone significant amounts of the hormone were released. Moreover, during the first hour, the rise in insulin concentration in the medium was 10-fold that detected in nontreated FTOInsm cells. Insulin produced by FTOInsm cells was biologically active because it blocked endogenous PEPCK gene expression and induced glucose uptake and lactate production. Thus, our results showed that genetically engineered FTOInsm hepatoma cells synthesized, processed, and secreted active insulin. The implantation of encapsulated engineered FTOInsm cells might provide a safe and practical therapeutic approach for IDDM treatment.