Male mice that are pttg-null develop sexually dimorphic diabetes with hypoinsulinemia secondary to reduced postnatal-cell proliferation and an inability to expand islet cell mass with aging. We therefore examined the effects of sex-steroid manipulation on diabetes development in pttg-/- male mice. Surgical gonadectomy was followed by implantation of 90-day slow-release pellets releasing 17beta-estradiol (0.36 mg/pellet), placebo or dihydrotestosterone (DHT; 12.5 mg/pellet). Mean fasting blood sugars at the end of the study were 414 +/- 54 mg/dl for pttg-/- controls and 371 +/- 14 mg/dl for pttg-/- mice gonadectomized and treated with DHT compared with 124 +/- 40 and 85 +/- 12 mg/dl in gonadectomized pttg-/- males treated with placebo or estradiol, respectively (P < 0.01 compared with control pttg-/-). Gonadectomy with and without estradiol treatment did not increase the very low circulating insulin levels in pttg-null males (fasting insulin 0.44 +/- 0.04 ng/ml in pttg-/- controls, 0.47 +/- 0.07 and 0.4 ng/ml in pttg-/- gonadectomized males treated with placebo or estradiol, respectively). Gonadectomy increased serum adiponectin levels (4.9 +/- 008 microg/ml in pttg-/- controls versus 13 +/- 0.08 and 7.5 +/- 0.6 microg/ml in pttg-/- gonadectomized males treated with placebo or estradiol, respectively; P < 0.001 and P < 0.05), accompanied by increased insulin sensitivity. The results show that gonadectomy delayed, and gonadectomy with additional estradiol treatment prevented, diabetes development in pttg-/- males, possibly through increased insulin sensitivity mediated by elevated serum adiponectin levels. Male-selective effects of disrupted beta-cell proliferation in the absence of pttg are restored by sex-steroid effects on peripheral insulin sensitivity.