We have previously shown that hemizygous transgenic mice expressing human islet amyloid polypeptide (hIAPP) in pancreatic beta-cells have no diabetic phenotype, whereas in the homozygous state, they developed severe, early-onset hyperglycemia associated with impaired insulin secretion and beta-cell death. We investigated the possibility that when the hemizygous mice are crossed onto an obese, insulin-resistant strain such as agouti viable yellow (A(vy)/a), they would exhibit a phenotype more akin to human type 2 diabetes. The hIAPP-expressing A(vy) males (TG-Y) displayed fasting hyperglycemia at 90 days of age and by 1 year progressed to severe hyperglycemia relative to their nontransgenic counterparts. Plasma insulin concentrations and pancreatic insulin content dropped 10- to 20-fold, suggesting severe impairment of beta-cell function. Histopathological findings revealed beta-cell degeneration and loss consistent with the drop in the plasma insulin concentration. In addition, large deposits of IAPP amyloid were present in TG-Y islets. We conclude that in transgenic mice expressing hIAPP, insulin resistance can induce overt, slow-onset diabetes associated with islet amyloid and decreased beta-cell mass.