Type 1 diabetes affects 20 million patients worldwide. Insulin is the primary and commonly the sole therapy for type 1 diabetes. However, only a minority of patients attain the targeted glucose control and reduced adverse events. We tested urocortin 2 gene transfer as single-agent therapy for insulin deficiency using two mouse models. Urocortin 2 gene transfer reduced blood glucose for months after a single intravenous injection, through increased skeletal muscle insulin sensitivity, increased insulin release in response to glucose stimulation, and increased plasma insulin levels before and during euglycemic clamp. The combined increases in both insulin availability and sensitivity resulted in improved glycemic indices-events that were not anticipated in these insulin-deficient models. In addition, urocortin 2 gene transfer reduced ocular manifestations of long-standing insulin deficiency such as vascular leak and improved retinal function. Finally, mortality was reduced by urocortin 2 gene transfer. The mechanisms for these beneficial effects included increased activities of AMP-activated protein kinase and Akt (protein kinase B) in skeletal muscle, increased skeletal muscle glucose uptake, and increased insulin release. These data suggest that urocortin 2 gene transfer may be a viable therapy for new onset type 1 diabetes and might reduce insulin needs in later stage disease.