The pathology of type II diabetes includes the presence of cytotoxic amyloid deposits in the islets of Langerhans. The main component of these deposits, islet amyloid polypeptide (IAPP), is a hormone involved in glucose metabolism and is normally co-secreted with insulin by the beta-cells of the pancreas. Here, we perform in vitro IAPP fibrillogenesis experiments in the presence and in the absence of insulin to elucidate the mechanism by which insulin acts on fiber formation. We find that insulin is an exceptionally potent inhibitor. In contrast to the vast excess of insulin over IAPP in vivo, substoichiometric amounts of insulin inhibit seeded and unseeded reactions by more than tenfold in vitro. Unusually, the magnitude of the inhibitory effect is dependent on the concentration of insulin, yet independent of the concentration of IAPP. In addition, insulin appears to bind non-specifically to fiber surfaces, giving rise to altered morphology. IAPP fiber formation in vitro requires a minimum of three steps: fiber-independent nucleation, elongation, and fiber-dependent nucleation. Furthermore, these steps are attenuated by the presence of a dispersed-phase transition. We interpret these data in the context of the phase-mediated fibrillogenesis model (PMF) and conclude through experiment and kinetic simulation that the dominant effect of insulin is to act on the elongation portion of the reaction. These results suggest that amyloid formation in type II diabetes involves either an additional agent that acts as an accelerant, or a step that segregates IAPP from insulin.