To explore the roles of lactogens in islet function, we generated a stable line of rat insulinoma (INS-1) cells that express rat placental lactogen II (rPLII) constitutively in culture. We used this cell line (Ins-rPLII) to examine the effects of endogenous rPLII on &bgr;-cell growth, islet formation, and the expression of glucose transporter 2 (glut-2) and insulin mRNA. Growth and maturation of Ins-rPLII cells were compared with that of cells transfected stably with an empty expression plasmid (control) and of INS-1 cells treated with exogenous prolactin. The Ins-rPLII cells proliferated more rapidly than control cells in serum-free medium and showed distinct morphologic characteristics in culture. Whereas the control cells flattened readily on plastic and formed a branching monolayer, the Ins-rPLII cells remained more rounded, sent out fewer projections, and formed more numerous (p< 0.01) and larger (p< 0.01) &bgr;-cell clusters. Larger clusters assumed a spherical form with well-delineated smooth borders and detached more readily from the culture plates. Maturational progression of the Ins-rPLII cells was associated with a 40% increase in preproinsulin mRNA (p< 0.05) and a 2–3-fold increase in glut-2 mRNA (p< 0.01). Induction of glut-2 mRNA was accompanied by a 1.4–2.4-fold increase (p< 0.01) in the uptake of radiolabeled 2-deoxyglucose. Similar effects were observed in INS-1 cells exposed for 48 h to exogenous prolactin. These findings suggest novel roles for the lactogenic hormones in the maturation and growth of pancreatic islets. Lactogen induction of &bgr;-cell aggregation coupled with localized &bgr;-cell growth may contribute to the expansion of islet mass that occurs in pregnancy and during the perinatal period. The induction of insulin and glut-2 mRNA provides a mechanism by which the lactogens may increase fetal and maternal insulin production and enhance the sensitivity of the pancreas to glucose.