Obesity-linked type 2 diabetes is a disease of insulin resistance combined with pancreatic beta-cell dysfunction. Although a role for beta-cell mass in the pathogenesis of obesity-linked type 2 diabetes has recently gained prominence, the idea is still being developed. It is proposed that in early obesity an increase in beta-cell mass and function might compensate for peripheral insulin resistance. However, as time and/or the severity of the obesity continue, there is decay in such adaptation and the beta-cell mass becomes inadequate. This, together with beta-cell dysfunction, leads to the onset of type 2 diabetes. It is becoming evident that elements in insulin and insulin growth factor (IGF)-1 signal-transduction pathways are key to regulating beta-cell growth. Current evidence indicates that interference of insulin signaling in obesity contributes to peripheral insulin resistance. This article examines whether a similar interference of IGF-1 signaling in the beta-cell could hinder upregulation of beta-cell mass and/or function, resulting in a failure to compensate for insulin resistance.