Insulin receptor substrate (IRS)-2 plays an important role in insulin signaling and its disruption results in diabetes in mice. In humans, the IRS-2 Gly1057Asp substitution was associated with lower risk of type 2 diabetes in lean individuals, but with a higher risk in obese individuals. To clarify the role of IRS-2 on the development of type 2 diabetes and obesity in Pima Indians, and particularly to investigate whether the effects of the Gly1057Asp polymorphism on metabolism are mediated by obesity, molecular scanning of the gene for mutations was performed and interaction of the polymorphism with obesity was tested. We identified the previously described Gly1057Asp mutation as well as a rare Asp819His mutation and four silent polymorphisms. The effect of the Gly1057Asp mutation on type 2 diabetes and obesity was tested in a large cohort of Pima Indians (n = 998). A subgroup of nondiabetic full-heritage Pima Indians (n = 233) had measurements of body composition, glucose tolerance, insulin action (M), endogenous glucose production (EGP; hyperinsulinemic clamp), acute insulin response (AIR, 25-g intravenous glucose tolerance test, n = 118 normal glucose-tolerant subjects), and percutaneous fat biopsy specimens from the periumbilical region (n = 160). A total of 132 nondiabetic subjects were included in longitudinal analyses. The frequency of the Asp1057 allele was 0.6. In cross-sectional analyses, subjects homozygous for the Asp1057 allele (Asp/Asp) had a higher prevalence of type 2 diabetes than heterozygote individuals and subjects homozygous for the Gly1057 allele (X/Gly, P = 0.04). There was no effect on BMI (P = 0.78) or gene-BMI interaction on the prevalence of type 2 diabetes (P = 0.57). In the nondiabetic subgroup, subjects with Asp/Asp had higher percent body fat (P = 0.01), BMI (P = 0.02), and waist circumference (P = 0.004), but there was no difference in metabolic characteristics (all P > 0.2). However, the relationship between percent body fat and fasting glucose, basal EGP, EGP during the clamp, AIR, and subcutaneous abdominal adipocyte size was significantly different in the Asp/Asp group (P for interaction = 0.02, 0.06, 0.0007, 0.08, and 0.006, respectively) compared with the X/Gly group, suggesting a more detrimental effect of Asp homozygosity on these traits with increasing percent body fat. In longitudinal analyses, among subjects in the upper tertile of change in percent body fat, those with Asp/Asp had a larger increase in fasting and postprandial glycemia and basal EGP and a larger decrease in M and AIR than subjects with X/Gly, independent of change in obesity (all P < 0.05). In conclusion, our findings suggest that the association of homozygosity for the Asp1057 allele in IRS-2 with type 2 diabetes in Pima Indians may be mediated by interaction of the polymorphism with obesity on several diabetes-related traits.