It has been proposed that the cytokine interleukin-1-beta (IL-1-beta), secreted by islet-infiltrating macrophages, may be involved in the pathogenesis of insulin-dependent diabetes mellitus by participation in beta-cell destruction. Addition of IL-1-beta to isolated pancreatic islets in vitro results in cytotoxic effects on beta-cell function, but there is little information on the intracellular events that convey the actions of the cytokine. In the present study, fetal rat pancreatic islets containing a high fraction of beta-cells were exposed in culture to IL-1-beta. It was found that IL-1-beta markedly decreased beta-cell DNA synthesis, insulin secretion and cyclic AMP content. In order to explore whether the decrease in cAMP resulted from IL-1-beta interaction with GTP-binding proteins coupled to adenylyl cyclase, islets were treated for 24 h with pertussis toxin prior to addition of cytokine. While this treatment restored the decrease in cAMP, the reduced DNA synthesis and insulin secretion persisted. Pertussis toxin treatment without the addition of IL-1-beta resulted in increases in cAMP, DNA synthesis and insulin secretion. Addition of the stimulatory cAMP analog Sp-cAMPS also increased DNA synthesis and insulin secretion, but failed to affect the decrease in these functions evoked by IL-1-beta. The protease inhibitor N-alpha-p-tosyl-L-lysine chloromethyl ketone, recently shown to protect completely against IL-1-beta-induced suppression of insulin production and secretion, was found to markedly reduce DNA synthesis without affecting insulin secretion. When the protease inhibitor was combined with IL-1-beta, the suppressed secretion was counteracted while DNA synthesis inhibition was not. It is concluded that cAMP stimulates DNA synthesis and insulin secretion in beta-cells, but that the inhibitory effect of IL-1-beta on these functions cannot be ascribed to the decrease in cAMP evoked by the cytokine. However, the repressive effect of the cytokine on insulin secretion, but not DNA synthesis, may be prevented by protease inhibition.