Somatostatin is a decapeptide secreted by the D cells of the pancreatic islets and similar D cells in the gastrointestinal mucosa. It is also secreted by the neurosecretory neurons of hypothalamus and other areas of the nervous system. Most of the factors that stimulate insulin secretion (e.g., glucose, arginine, leucine, CCK) also stimulate the secretion of somatostatin.

In the nervous system, somatostatin functions as a peptidergic neurotransmitter. Somatostatin inhibits the secretion of several hormone including GH, TSH, insulin, glucagon and gastrin. It also reduces intestinal absorption of glucose. It produces a decrease in blood glucose concentration.

Somatostatin is secreted not only into the blood stream but also into the gastric lumen. Its secretion is stimulated by acid in the lumen. The somatostatin secreted into the gastric lumen mixes with the gastric juice. Thereafter, it acts on the gastric mucosa to inhibit gastrin secretion. It is probable that the inhibitory effect of gastric acid on gastrin secretion is mediated by somatostatin.

The above action of somatostatin is an example of paracrine control, wherein a secretion diffuses though the ECF to affect neighboring cells some distance away. Somatostatin also inhibits pancreatic exocrine secretion, gastric acid secretion and motility, gallbladder contraction and the absorption of glucose, amino acids, and triglycerides.