Insulin resistance, a smaller than expected response to a given dose of insulin, is associated with many common diseases including, ageing, polycystic ovarian disease, syndrome X, cancer, infections, trauma and, most significantly, obesity and type 2 diabetes mellitus. The biochemical basis of insulin resistance in type 2 diabetes has been the subject of many studies. Earlier studies have indicated that quantitative regulation of the insulin sensitive glucose transporters (Glut-4) and insulin receptors themselves may contribute to this disorder, however, these two factors are probably inadequate to explain the extent of insulin resistance. This point also became apparent by the development of only mild hyperinsulinaemia in mice with a targeted mutation in the Glut-4 gene. Studies on postreceptor defects in type 2 diabetes has recently focused on the intrinsic catalytic activity of the insulin receptor and downstream signalling events. A reduction in tyrosine phosphorylation of both the insulin receptor (IR) and the insulin receptor substrate-1 (IRS-1) has been noted in both animal and human type 2 diabetes. Importantly, this appears to occur in all of the major insulin-sensitive tissues, namely the muscle, fat and liver. It is now clear that decreased signalling capacity of the insulin receptor is an important component of this disease. I will review some of the potential mechanisms underlying this deficiency.