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The effect of progesterone (P) on pancreatic islet-cell proliferation and function of cyclic and pregnant rats was investigated in vivo. Silastic tubes containing P were inserted s.c. in cyclic rats for 7 or 14 days and in pregnant rats from day 7 to 14, from day 14 to 21 or from day 7 to 21 of pregnancy. 5-Bromo-2-deoxyuridine (BrdU) was infused during the last 24 h of the treatment; the proportion of dividing islet-cells was determined in pancreatic sections, which were immunostained for BrdU. Islet-cell function was determined by measuring glucose and insulin response to a standard intravenous glucose challenge. P treatment increased P and 20 alpha-dihydroprogesterone (20 alpha-OHP) levels in cyclic rats; in pregnant rats, only the plasma levels of 20 alpha-OHP were elevated. Both 7 and 14 days of P treatment stimulated islet-cell proliferation in cyclic rats. In pregnant rats, P treatment increased islet-cell proliferation on day 14, but not on day 21 after either 7 or 14 days of P treatment. P did not affect plasma lactogenic activity in pregnant rats; plasma concentrations of prolactin were decreased after 14 days of P treatment in cyclic rats, but were not affected in pregnant rats. P treatment had no effect on glucose tolerance and glucose-stimulated insulin secretion in any of the groups. It was concluded that: 1, in vivo P stimulates islet-cell proliferation, but does not affect islet-cell function, 2. the stimulatory effects of P are indirect and possibly mediated by the P metabolite 20 alpha-OHP and 3. at the end of gestation, stimulation of islet-cell proliferation is inhibited by some factor, which is not identical to P.