The development of an efficient expression system for insulin-like growth factor-I (IGF-I) in Escherichia coli as a fusion protein is described. The fusion protein consists of an N-terminal extension made up of the first 46 amino acids of methionyl porcine GH ([Met1]-pGH) followed by the dipeptide Val-Asn. The latter two residues provide a unique hydroxylamine-sensitive link between [Met1]-pGH(1-46) and the N-terminal Gly of IGF-I. Downstream processing of the fusion proteins involved isolation of inclusion bodies, cleavage at the Asn-Gly bond, refolding of the reduced IGF-I peptide and purification to homogeneity. This expression system was also used to produce two variants of IGF-I in which Glu3 was substituted by either Gly or Arg to give [Gly3]-IGF-I and [Arg3]-IGF-I respectively. Production of milligram quantities of IGF-I peptide was readily achieved. The purity of the IGF-I, [Gly3]-IGF-I and [Arg3]-IGF-I was established by high-performance liquid chromatography and N-terminal sequence analysis. [Gly3]-IGF-I and [Arg3]-IGF-I were more potent than IGF-I in biological assays measuring stimulation of protein synthesis and DNA synthesis or inhibition of protein breakdown in rat L6 myoblasts. Both analogues bound very poorly to bovine IGF-binding protein-2 and slightly less well than IGF-I to the type-1 receptor on rat L6 myoblasts. We conclude that reduced binding to IGF-binding proteins rather than increased receptor binding is the likely explanation for the greater biological potency of the analogues compared with IGF-I.