Gamma amino butyric acid (GABA) and its related enzymes have been demonstrated in pancreatic beta cells of normal rat. Antibodies against GABA-synthesizing enzymes have been implicated in the pathogenesis of Type I diabetes. In spite of the importance of GABA in the aetiology of diabetes mellitus, detailed morphological data on the pattern of distribution of GABA in the pancreas of normal and diabetic rats are lacking. Diabetes mellitus (DM) was induced by a single dose of streptozotocin (STZ) given intraperitoneally (60 mg kg body weight(-1)). Four weeks after the induction of DM, normal (n = 6) and diabetic (n = 6) rats were anesthetized with chloral hydrate and their pancreata were removed and processed for the localization and effect of GABA on insulin secretion using immunohistochemistry and radioimmunoassay techniques. The number of GABA-like immunoreactive (GABA-LIR) cells in the pancreatic islets of STZ-diabetic rats decreased significantly (P<0.0001) when compared to non-diabetic control rats. The pattern and percentage distribution of GABA in the islet of Langerhans of normal and diabetic rat was similar to that of insulin. GABA induced a significant (P<0.0007) increase in insulin secretion from the pancreas of normal rats. In diabetic pancreas, GABA evoked a higher but not significant (P<0.1) increase in insulin secretion. These findings showed that the number of GABA-LIR cells is reduced significantly in diabetes. Moreover, GABA is a strong secretagogue of insulin from the pancreas of normal rat.