A gene therapy-based treatment of type 1 diabetes mellitus requires the development of a surrogate β cell that can synthesize and secrete functionally active insulin in response to physiologically relevant changes in ambient glucose levels. In this study, the murine enteroendocrine cell line STC-1 was genetically modified by stable transfection. Two clone cells were selected (STC-1-2 and STC-1-14) that secreted the highest levels of insulin among the 22 clones expressing insulin from 0 to 157.2 μIU/ml/106 cells/d. After glucose concentration in the culture medium was increased from 1 mM to 10 mM, secreted insulin rose from 40.3±0.8 to 56.3±3.2 μIU/ml (STC-1-2), and from 10.8±0.8 to 23.6±2.3 μIU/ml (STC-1-14). After STC-1-14 cells were implanted into diabetic nude mice, their blood glucose levels were reduced to normal. Body weight loss was also ameliorated. Our data suggested that genetically engineered K cells secrete active insulin in a glucose-regulated manner, and in vivo study showed that hyperglycemia could be reversed by implantation of the cells, suggesting that the use of genetically engineered K cells to express human insulin might provide a glucose-regulated approach to treat diabetic hyperglycemia.