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IAPP has been postulated to have a role as a modulating factor in glucose homoeostasis and to be involved in the pathophysiology of diabetes. However, the normal physiological functions of the peptide remain obscure: exogenous IAPP acts on many experimental systems to modulate nutrient supply and metabolism but there is no evidence to suggest that circulating IAPP has an aetiological role in the onset of Type-2 diabetes. Amyloid deposits formed from polymerized IAPP progressively accumulate in the islets of Type-2 diabetic patients. These insoluble deposits do not precipitate the onset of hyperglycaemia in Type-2 diabetes, but progressive accumulation of amyloid is associated with islet cell destruction and decreased islet function in the later stages of the disease. Although the causative factors of formation of the first IAPP fibril are unknown, continued high levels of insulin and IAPP secretion as a result of nutrient stimulation or insulin resistance will promote binding to preformed fibrils and extension of the deposits. It is important that methods to identify patients susceptible to amyloid deposition are developed and therapeutic agents are produced that can reduce or prevent polymerizatin of IAPP to form amyloid and minimize severe deterioration of islet function in Type-2 diabetes.