Pancreatic beta-cell secretory activity was measured in 17 patients with insulin-dependent diabetes mellitus of less than 19 months' duration and in 10 nondiabetic subjects by means of the peripheral plasma C-peptide response to 1 mg. of glucagon I.V. The C-peptide response to a meal was also measured in the diabetic patients. Residual beta-cell function was present in all the diabetic patients as indicated by significant amounts of C-peptide in plasma. Significant increases in C-peptide were observed in 16 after glucagon stimulation and in 15 after the meal. Both absolute and relative increase in C-peptide were reduced in the diabetic patients. The increase in C-peptide was correlated to the fasting C-peptide concentration both after glucagon (r=0.86, p less than 0.001) and after the meal (r=0.66, p less than 0.01). The responses to the meal and to glucagon were correlated (r=0.77, p less than 0.005), indicating a high predictive value of the glucagon test as to how the beta-cells will respond during normal daily life.