Amyloid deposits that characteristically form in the pancreatic islets of patients with non-insulin-dependent diabetes mellitus (NIDDM) and in insulinomas are both derived from islet amyloid polypeptide (IAPP). Evidence from previous studies has suggested that deposition of IAPP-derived amyloid is related to inherent amyloidogenic sequences present within normal human IAPP, together with an increased production and local concentration of IAPP. However, whether the aggregation of IAPP to form amyloid fibrils is primarily an intra- or extracellular event is not clear. To address this question, we studied 20 human insulinomas by light and electron microscopy. By light microscopy, amyloid deposits were demonstrated in 13 of 20 (65%) human insulinomas. Furthermore, evaluation of Congo red-stained tumor sections showed small, globular or irregular, congophilic amyloid deposits within the cytoplasm of many tumor cells in 10 of 13 (77%) amyloid-containing insulinomas. Dense, punctate areas of IAPP immunoreactivity within tumor cells corresponded with the congophilic intracellular deposits. Ubiquitin immunoreactivity also was observed as punctate intracellular labeling and within large extracellular amyloid deposits. Among the 10 insulinomas available for electron microscopic evaluation, pathological IAPP- immunoreactive (immunogold) deposits were found in 3 of 5 insulinomas in which amyloid was demonstrated by light microscopy and in none of 5 tumors found negative for amyloid by light microscopy. Morphology of IAPP- immunoreactive deposits varied from those with the classical distinct 7- to 10-nm diameter nonbranching fibrils to those with distinct but faint fibrillarity to those without discernable fibrils. In each of the 3 tumors with ultrastructurally demonstrable amyloid deposits, intracellular aggregates of IAPP-immunoreactive amyloid fibrils were observed either free in the cytoplasmic matrix or in membrane-bound structures. Intracellular IAPP-immunoreactive deposits were up to 10 μm in the greatest dimension. Free intracellular aggregates of amyloid fibrils sometimes contained degenerating secretory vesicles and fragments of membranous organelles. These observations suggest that IAPP-derived amyloid deposits are initially formed intracellularly and are subsequently released to the extracellular space by exocytosis of the membrane-bound structures and/or after necrosis of the tumor cells. Our observations raise the possibility that IAPP-derived islet amyloid deposits (characteristically present in NIDDM patients) also may be initially formed within the cytoplasm of β-cells, thus leading to β-cell necrosis and a reduction of β-cell mass as seen in NIDDM.