Glucocorticoids play an important role in the pathogenesis of obesity and insulin resistance. Impaired conversion of cortisone (E) to cortisol (F) by the type 1 isoenzyme of 11beta-hydroxysteroid dehydrogenase (11beta-HSD) in obesity may represent a protective mechanism preventing ongoing weight gain and glucose intolerance. We have studied glucocorticoid metabolism in 33 male subjects with type 2 diabetes mellitus [age, 44.2 +/- 13 yr; body mass index (BMI), 31.1 +/- 7.5 kg/m(2) (mean +/- sd)] and 38 normal controls (age, 41.4 +/- 14 yr; BMI, 38.2 +/- 12.8 kg/m(2)). Circulating F:E ratios were elevated in the diabetic group and correlated with serum cholesterol and homeostasis model assessment-S. There was no difference in 11beta-HSD1 activity between diabetic subjects and controls. In addition, 11beta-HSD1 activity was unaffected by BMI in diabetic subjects. However, in control subjects, increasing BMI was associated with a reduction in the urinary tetrahydrocortisol+5alpha-tetrahydrocortisol:tetrahydrocortisone ratio (P < 0.05) indicative of impaired 11beta-HSD1 activity. The degree of inhibition correlated tightly with visceral fat mass. Changes in 11beta-HSD1 activity could not be explained by circulating levels of adipocytokines. Impaired E to F metabolism in obesity may help preserve insulin sensitivity and prevent diabetes mellitus. Failure to down-regulate 11beta-HSD1 activity in patients with diabetes may potentiate dyslipidemia, insulin resistance, and obesity. Inhibition of 11beta-HSD1 may therefore represent a therapeutic strategy in patients with type 2 diabetes mellitus and obesity.