Amyloid formation has been implicated in a wide range of human diseases including Alzheimer's disease, Parkinson's disease, and type 2 diabetes. In type 2 diabetes, islet amyloid polypeptide (IAPP, also known as amylin) forms cytotoxic amyloid deposits in the pancreas, and these are believed to contribute to the pathology of the disease. The mechanism of islet amyloid formation is not understood; however, recent proposals have invoked a role for incompletely processed proIAPP. In this model, incompletely processed proIAPP containing the N-terminal pro region is excreted and binds to heparan sulfate proteoglycans (HSPGs) of the basement membrane thereby establishing a high local concentration which can act as a seed for amyloid formation. Here we report biophysical proof-of-principle experiments designed to test the viability of this model. The model predicts that interactions with HSPGs should accelerate amyloid formation by the proIAPP processing intermediate, and this is indeed what is observed. Interaction with heparan sulfate leads to the rapid formation of an intermediate state with partial helical content which then converts, on a slower time scale, to amyloid fibrils. TEM shows that fibrils formed by the proIAPP processing intermediate in the presence and in the absence of heparan sulfate have the classic features of amyloid. Fibrils formed by the proIAPP processing intermediate are competent to seed amyloid formation by mature IAPP. The seeding experiments support a second major premise of the model, namely, that fibrils formed by the processing intermediate are capable of seeding amyloid formation by the mature peptide.