Glucocorticoids are diabetogenic hormones because they decrease glucose uptake, increase hepatic glucose production, and inhibit insulin release. To study the long-term effects of increased glucocorticoid sensitivity in beta-cells, we studied transgenic mice overexpressing the rat glucocorticoid receptor targeted to the beta-cells using the rat insulin I promoter. Here we report that these mice developed hyperglycemia both in the fed and the overnight-fasted states at 12-15 months of age. Progression from impaired glucose tolerance, previously observed in the same colony at the age of 3 months, to manifest diabetes was not associated with morphological changes or increased apoptosis in the beta-cells. Instead, our current results suggest that the development of diabetes is due to augmented inhibition of insulin secretion through alpha(2)-adrenergic receptors (alpha(2)-ARs). Thus, we found a significantly higher density of alpha(2)-ARs in the islets of transgenic mice compared with controls, based on binding studies with the alpha(2)-AR agonist UK 14304. Furthermore, incubation of islets with benextramine, a selective antagonist of the alpha(2)-AR, restored insulin secretion in response to glucose in isolated islets from transgenic mice, whereas it had no effect on control islets. These results indicate that the chronic enhancement of glucocorticoid signaling in pancreatic beta-cells results in hyperglycemia and impaired glucose tolerance. This effect may involve signaling pathways that participate in the regulation of insulin secretion via the alpha(2)-AR.