We studied the effects of alloxan on insulin and glucagon secretion, islet insulin content, and morphology of human fetal islet-like cell clusters (ICCs). ICCs were derived after collagenase digestion and culture of pancreata from two fetuses. Culture medium (RPMI 1640) containing either 2.0 (low) or 11.1 (high) mM glucose was used during the alloxan exposure. Alloxan exposure lasted for 5 min at room temperature, with final concentrations of 0.3, 1, 3, 10, 30 and 100 mM. Medium samples were collected for hormone assays on days 0, 1, 2, 3, 6, and 10 and islet insulin contents were measured on day 10 after alloxan treatment. Electron microscopy of ICCs was done 24 h after the drug exposure. Control ICCs steadily increased their insulin secretion during the whole study period. Alloxan concentrations above 0.3 mM significantly (p < 0.01) decreased insulin secretion at the low glucose concentration. High glucose protected beta cells from alloxan toxicity. There was no difference in islet insulin contents between alloxan-treated and control cultures. Glucagon secretion by glucose media was not affected by alloxan exposure. All islet cells including beta cells remained intact in electron microscopy. The results suggest a block in insulin secretion by alloxan, but beta cells appear to recover at least partly in their insulin-secreting capacity.