Insulin and insulin-like growth factor-I (IGF-I) activate anti-apoptotic pathways via insulin receptor substrate (IRS) proteins in most mammalian cells including -cells. IRS-1 knockout (IRS-1KO) mice show growth retardation, hyperinsulinemia and hyperplastic but dysfunctional islets without developing overt diabetes, while IRS-2KOs develop strain-dependent insulin resistance and islet hypoplasia leading to diabetes. Since both models display insulin resistance it is difficult to differentiate islet response to insulin resistance from islet defects due to loss of proteins in the islets itself. We used a transplantation approach, as a means of separating host insulin resistance from islet function, to examine alterations in proteins in insulin/IGF-I signaling pathways that may contribute to -cell proliferation and/or apoptosis in IRS-1KO islets. Islets isolated from wildtype (WT) or IRS-1KO mice were transplanted into WT or insulin resistant IRS-1KO males under the kidney capsule. The -cell mitotic rate in transplanted islets in IRS-1KO recipients was increased 1.5-fold compared to WT recipients, and was similar to that in endogenous pancreases of IRS-1KOs, while -cell apoptosis was reduced by ~80% in IRS-1KO grafts in IRS-1KO recipients compared to WT recipients. Immunohistochemistry showed a substantial increase in IRS-2 expression in IRS-1KO islets transplanted into IRS-1KO mice as well as in endogenous islets from IRS-1KOs. Furthermore, enhanced cytosolic Forkhead transcription factor (FoxO1) staining in IRS-1KO grafts suggests intact Akt/PKB activity. Together, these data indicate that even in the absence of insulin resistance, []beta]]-cells deficient in IRS-1 exhibit a compensatory increase in IRS-2, which is associated with islet growth and is characterized by both proliferative and anti-apoptotic effects that likely occur via an insulin/IGF-1/IRS-2 pathway.