In this article, we present several important contributions necessary for enabling an artificial endocrine pancreas (AP) system to better respond to exercise events. First, we show how exercise can be automatically detected using body-worn accelerometer and heart rate sensors. During a 22 hour overnight inpatient study, 13 subjects with type 1 diabetes wearing a Zephyr accelerometer and heart rate monitor underwent 45 minutes of mild aerobic treadmill exercise while controlling their glucose levels using sensor-augmented pump therapy. We used the accelerometer and heart rate as inputs into a validated regression model. Using this model, we were able to detect the exercise event with a sensitivity of 97.2% and a specificity of 99.5%. Second, from this same study, we show how patients' glucose declined during the exercise event and we present results from in silico modeling that demonstrate how including an exercise model in the glucoregulatory model improves the estimation of the drop in glucose during exercise. Last, we present an exercise dosing adjustment algorithm and describe parameter tuning and performance using an in silico glucoregulatory model during an exercise event.