The prevalence of type 2 diabetes mellitus (T2DM) among adolescents has increased 5- to 10-fold over the past decade. T2DM results from pancreatic beta-cell dysfunction and insulin resistance. Using rapid iv glucose tolerance testing, we examined beta-cell function and insulin resistance in 72 predominantly Latino eighth grade students (41 males and 31 females; mean +/- sem age, 13.6 +/- 0.1 yr). Thirty-six percent of the children had body mass indexes above the 85th percentile for age and gender, and 50% had a first- or second-degree relative with T2DM. Overweight children were five times more likely to be in the highest quartile for insulin resistance. Children with a family history of T2DM were five times more likely to be in the lowest quartile for insulin secretory capacity, 4.5 times more likely to be in the lowest quartile for glucose disposal, and three times more likely to be in the lowest quartile for insulin resistance. These findings are consistent with a model for the physiology of T2DM in which a familial beta-cell dysfunction is unmasked by increasing insulin resistance secondary to overweight in this predominantly Latino population.