We aimed to assess prandial responses, basal glucose turnover and insulin action (euglycaemic clamp) in a very low-dose neonatal streptozotocin model of Type 2 (non-insulin-dependent) diabetes mellitus. Male Wistar rats were injected at 2 days of age with 45 mg/kg streptozotocin or vehicle (control). At 8 weeks, the groups were subdivided and fed either a high-fat or high-starch diet for 3 weeks. Both the fat diet and streptozotocin treatments had independent hyperglycaemic effects (streptozotocin/fat 9.3 +/- 0.3 mmol/l; streptozotocin/starch 7.5 +/- 0.3 mmol/l; control/fat 7.4 +/- 0.1 mmol/l; all p less than 0.01 vs control/starch 6.4 +/- 0.1 mmol/l). The fat diet effect was associated with both a reduction in basal glucose clearance (p less than 0.001) and in basal hepatic glucose output (p less than 0.05). Streptozotocin increased basal hepatic glucose output. Significantly higher prandial glycaemia in the streptozotocin/starch group occurred despite similar insulin levels and appeared to be related to an impaired early insulin response. Whole-body and tissue-specific insulin sensitivity were significantly depressed in fat-fed animals compared to starch-fed animals, however there were no significant effects of streptozotocin treatment. We conclude that fasting hyperglycaemia associated with abnormalities in both glucose production and clearance can exist in the presence of a basal hepatic glucose output which is reduced compared to control animals. Furthermore, dietary-fat-induced insulin resistance is not exacerbated by the relative insulin deficiency and/or mild hyperglycaemia observed when dietary fat and neonatal streptozotocin-treatments are combined.