Preincubation of rat islets of Langerhans with the potent inhibitors of islet transglutaminase activity, monodansylcadaverine (30-100 microM) and N-(5-aminopentyl)-2-naphthalenesulphonamide (100-200 microM), led to significant inhibition of glucose-stimulated insulin release from islets. In contrast, the respective N'-dimethylated derivatives of these two compounds, which did not inhibit islet transglutaminase activity, were much less effective as inhibitors of glucose-stimulated insulin release. None of the compounds inhibited rat spleen protein kinase C activity at concentrations which gave rise to inhibition of glucose-stimulated insulin release. When tested for their effects on calmodulin-stimulated bovine heart phosphodiesterase activity, of the compounds that inhibited insulin release, only monodansylcadaverine did not act as an effective antagonist of calmodulin at concentrations (up to 50 microM) that gave rise to significant inhibition of glucose-stimulated insulin release. Furthermore, at 50 microM, monodansylcadaverine did not inhibit methylation of islet lipids. The inhibition of glucose-stimulated insulin release by monodansylcadaverine is therefore likely to be attributable to its interference with islet transglutaminase activity. The sensitivity of islet transglutaminase to activation by Ca2+ was investigated by using a modified assay incorporating dephosphorylated NN'-dimethylcasein as a substrate protein. The Km for Ca2+ obtained (approx. 3 microM) was an order of magnitude lower than previously reported for the islet enzyme [Bungay, Potter & Griffin (1984) Biochem. J. 219, 819-827]. Mg2+ (2 mM) was found to have little effect on the sensitivity of the enzyme to Ca2+. Investigation of the endogenous substrate proteins of islet transglutaminase by using the Ca2+-dependent incorporation of [14C]methylamine into proteins of islet homogenates demonstrated that most of the incorporated radiolabel was present in cross-linked polymeric aggregates which did not traverse 3% (w/v) acrylamide gels. The radiolabelled polymeric aggregates were present in 71 000 g-sedimented material of homogenates, and their formation was transglutaminase-mediated. These findings provide new evidence for the involvement of islet transglutaminase in the membrane-mediated events necessary for glucose-stimulated insulin release.