The aim of this study was to develop an experimental model for the study of cancer associated with diabetes. For diabetes induction, Sprague-Dawley rats were given streptozotocin (STZ, 90mg/kg body weight (BW)), by intraperitoneal injection on the second day of life. For mammary tumour induction, rats were injected with 50mg/kg BW of N-nitroso-N-methylurea (NMU) at 50, 80 and 110 days old. The neoplastic process and the effect of tamoxifen treatment was examined in non-diabetic and diabetic rats. The latency period, NMU-induced tumour incidence and the number of tumours per rat in diabetic rats versus controls were 117±7 days versus 79±9 days (P<0.001); 93% versus 95% (NS); and 5.2±1.6 versus 2.7±0.5 (P<0.02). A more benign histological pattern for tumours in diabetic animals was observed. Mammary tumours in diabetic rats grew more slowly than in controls. Tamoxifen (1mg/kg/day) treated diabetic rats showed tumour regression in 67% of NMU-induced mammary tumours versus 53% in controls (NS). Our results show that tumour progression seems to be affected by diabetes in this experimental model. We suggest this is the result of changes to insulin-like growth factors and their receptors, which occur in diabetics, and our future research will examine this hypothesis.