In this study we have explored whether the bifunctional protein semicarbazide-sensitive amine oxidase (SSAO)/vascular adhesion protein-1 (VAP-1) represents a novel target for type 2 diabetes. To this end, Goto-Kakizaki (GK) diabetic rats were treated with the SSAO substrate benzylamine and with low ineffective doses of vanadate previously shown to have antidiabetic effects in streptozotocin-induced diabetic rats. The administration of benzylamine in combination with vanadate in type 2 diabetic rats acutely stimulated glucose tolerance, and the chronic treatment normalized hyperglycemia, stimulated glucose transport in adipocytes, and reversed muscle insulin resistance. Acute in vivo administration of benzylamine and vanadate stimulated skeletal muscle glucose transport, an effect that was also observed in incubated muscle preparations coincubated with adipose tissue explants or with human recombinant SSAO. Acute administration of benzylamine/vanadate also ameliorated insulin secretion in diabetic GK rats, and this effect was also observed in incubated pancreatic islets. In keeping with these observations, we also demonstrate that pancreatic islets express SSAO/VAP-1. As far as mechanisms of action, we have found that benzylamine/vanadate causes enhanced tyrosine phosphorylation of proteins and reduced protein tyrosine phosphatase activity in adipocytes. In addition, incubation of human recombinant SSAO, benzylamine, and vanadate generates peroxovanadium compounds in vitro. Based on these data, we propose that benzylamine/vanadate administration generates peroxovanadium locally in pancreatic islets, which stimulates insulin secretion and also produces peroxovanadium in adipose tissue, activating glucose metabolism in adipocytes and in neighboring muscle. This opens the possibility of using the SSAO/VAP-1 activity as a local generator of protein tyrosine phosphatase inhibitors in antidiabetic therapy.