Thanks to Andrew Torres <andym(AT)ku.edu> for this section.

C-peptide blood levels can indicate whether or not a person is producing
insulin and roughly how much.

Insulin is initially synthesized in the form of proinsulin.  In this form the
alpha and beta chains of active insulin are linked by a third polypeptide
chain called the connecting peptide, or c-peptide, for short. Because both
insulin and c-peptide molecules are secreted, for every molecule of insulin
in the blood, there is one of c-peptide. Therefore, levels of c-peptide in
the blood can be measured and used as an indicator of insulin production in
those cases where exogenous insulin (from injection) is present and mixed
with endogenous insulin (that produced by the body) a situation that would
make meaningless a measurement of insulin itself. The c-peptide test can also
be used to help assess if high blood glucose is due to reduced insulin
production or to reduced glucose intake by the cells.

There is little or no c-peptide in blood of type 1 diabetics, and c-peptide
levels in type 2 diabetics can be reduced or normal. The concentrations of
c-peptide in non-diabetics are on the order of 0.5-3.0 ng/ml.