AIMS: Recent studies have indicated that proinsulin C-peptide shows specific binding to cell membrane binding sites and may exert biological effects when administered to patients with Type 1 diabetes mellitus. This study was undertaken to determine if combined treatment with C-peptide and insulin might reduce the level of microalbuminuria in patients with Type 1 diabetes and incipient nephropathy. METHODS: Twenty-one normotensive patients with microalbuminuria were studied for 6 months in a double-blind, randomized, cross-over design. The patients received s.c. injections of either human C-peptide (600 nmol/24 h) or placebo plus their regular insulin regimen for 3 months. RESULTS: Glycaemic control improved slightly during the study and to a similar extent in both treatment groups. Blood pressure was unaltered throughout the study. During the C-peptide treatment period, urinary albumin excretion decreased progressively on average from 58 microg/min (basal) to 34 microg/min (3 months, P < 0.01) and it tended to increase, but not significantly so, during the placebo period. The difference between the two treatment periods was statistically significant (P < 0.01). In the 12 patients with signs of autonomic neuropathy prior to the study, respiratory heart rate variability increased by 21 +/- 9% (P < 0.05) during treatment with C-peptide but was unaltered during placebo. Thermal thresholds were significantly improved during C-peptide treatment in comparison to placebo (n = 6, P < 0.05). CONCLUSION: These results indicate that combined treatment with C-peptide and insulin for 3 months may improve renal function by diminishing urinary albumin excretion and ameliorate autonomic and sensory nerve dysfunction in patients with Type 1 diabetes mellitus.