Abstract: A biologically active peptide associated with diabetes and designated herein "amylin" and processes for preparing it and assaying for it and for Type 2 diabetes are disclosed. The invention includes peptides having the amino acid sequence KCNTATCATQRLANFLVHSSNNFGAILSSTNVGSNTY, substantially homologous sequences of amino acids, proamylin, as well as biologically active subfragments and conservative mutations. The peptide may be prepared from diabetic pancreata by solubilization of amyloid and isolation of the peptide by gel filtration and reverse phase chromotography. Amylin may also be synthesized, or it may be produced by recombinant DNA techniques using the disclosed nucleic acid sequences.