PDZD2 (PDZ domain containing 2) is a multi-PDZ protein expressed in pancreas and many other tissues. PDZD2 shows extensive homology to pro-interleukin-16 (pro-IL-16) and is localized mainly to the endoplasmic reticulum. We have recently demonstrated that PDZD2, like pro-IL-16, is proteolytically cleaved at its C-terminus to generate a secreted protein, sPDZD2 (for secreted PDZD2). To understand the possible functional role of PDZD2 in pancreas, we investigated the cellular distribution of PDZD2 in adult pancreas using an antiserum that recognizes both the full-length and secreted forms of PDZD2. Immunohistochemical analysis revealed a strong expression of PDZD2 in pancreatic islet beta cells but not alpha cells. Consistent with the beta-cell-enriched expression of PDZD2, immunoblot analysis indicated expression of both full-length PDZD2 and sPDZD2 in the insulinoma cell line INS-1E. A recombinant sPDZD2 protein was synthesized for study of its functional effect on INS-1E cells. In culture media with limiting serum, co-incubation with sPDZD2 stimulated the proliferation of INS-1E cells. The mitogenic effect of sPDZD2 was concentration-dependent, and was associated with a slight inhibition of the insulin promoter activity at high sPDZD2 concentrations. As a potential mitogen of beta-like cells, sPDZD2 may be useful for the optimization of beta-cell growth and differentiation in vitro.