C-Peptide is a small protein that is produced when the body makes insulin. It is formed from the proinsulin molecule, which is a precursor to insulin. When proinsulin is split into insulin and C-Peptide, both are released into the bloodstream. Measuring C-Peptide levels can help determine how much insulin the body is producing. Doctors often use C-Peptide tests to differentiate between type 1 and type 2 diabetes. In type 1 diabetes, the body produces little to no insulin, resulting in low C-Peptide levels. In contrast, individuals with type 2 diabetes may have normal or high levels of C-Peptide due to insulin resistance.