Hybrid insulin peptides (HIPs) form in beta-cells when insulin fragments link to other peptides through a peptide bond. HIPs contain nongenomic amino acid sequences and have been identified as targets for autoreactive T cells in type 1 diabetes. A subgroup of HIPs, in which N-terminal amine groups of various peptides are linked to aspartic acid residues of insulin C-peptide, was detected through mass spectrometry in pancreatic islets. Here, we investigate a novel mechanism that leads to the formation of these HIPs in human and murine islets. Our research herein shows that these HIPs form spontaneously in beta-cells through a mechanism involving an aspartic anhydride intermediate. This mechanism leads to the formation of a regular HIP containing a standard peptide bond as well as a HIP-isomer containing an isopeptide bond by linkage to the carboxylic acid side chain of the aspartic acid residue. We used mass spectrometric analyses to confirm the presence of both HIP isomers in islets, thereby validating the occurrence of this novel reaction mechanism in beta-cells. The spontaneous formation of new peptide bonds within cells may lead to the development of neoepitopes that contribute to the pathogenesis of type 1 diabetes as well as other autoimmune diseases.