Both major forms of diabetes involve a decline in beta-cell mass, mediated by autoimmune destruction of insulin-producing cells in type 1 diabetes and by increased rates of apoptosis secondary to metabolic stress in type 2 diabetes. Methods for controlled expansion of beta-cell mass are currently not available, but would have great potential utility for treatment of these diseases. In the current study, we demonstrate that overexpression of trefoil factor 3 (TFF3) in rat pancreatic islets results in a 4-5-fold increase in [(3)H]-thymidine incorporation, with full retention of glucose-stimulated insulin secretion. This increase was almost exclusively due to stimulation of beta-cell replication, as demonstrated by studies of bromodeoxyuridine (BrdU) incorporation and coimmunofluorescence analysis with anti-BrdU and anti-insulin or anti-glucagon antibodies. The proliferative effect of TFF3 required the presence of serum or 0.5 ng/ml of epidermal growth factor (EGF). The ability of TFF3 overexpression to stimulate proliferation of rat islets in serum was abolished by the addition of an EGF receptor (EGFR) antagonist AG1478. Furthermore, TFF3-induced increases in [(3)H]-thymidine incorporation in rat islets cultured in serum was blocked by overexpression of a dominant negative Akt protein or treatment with Triciribine, an Akt inhibitor. Finally, overexpression of TFF3 also caused a doubling of [(3)H]-thymidine incorporation in human islets. In summary, our findings reveal a novel TFF3-mediated pathway for stimulation of beta-cell replication that could ultimately be exploited for expansion or preservation of islet beta-cell mass.