Determinants of glucose intolerance were studied in 163 obese Japanese young adults, 18 to 21 years old (43 females,120 males), who underwent 75-g oral glucose tolerance testing. Type 2 diabetes was newly diagnosed in 2.9% (n = 4); impaired fasting glucose (IFG) in 5.1% (n = 7); and impaired glucose tolerance (IGT) in 10.9% (n = 15). A homeostasis model assessment of insulin resistance (HOMA-IR) was used to estimate insulin sensitivity; beta-cell function during the first 30 min of the test was measured and defined as the insulinogenic index. This index was adjusted for insulin sensitivity, since this affects both beta-cell function and glucose disposition (disposition index). The relationship between insulinogenic index and 1/HOMA-IR was not hyperbolic. However, the disposition index (DI) was useful for the estimation of beta-cell function with the correct confirmation about it validity using beta-cell function index (BI). The association between insulin sensitivity and beta-cell function to glucose disposal, as measured by the area under the glucose curve (AUCg), was examined in all subjects. Insulin sensitivity was significantly related to AUCg (log HOMA-IR; R (2) = 0.142, p<0.0001). On the other hand, an inverse curvilinear relationship was observed between beta-cell function and AUCg (log(Delta I/Delta G)/HOMA-IR, R (2) = 0.411, p<0.0001). Thus, impaired beta-cell function, when estimated as DI, was strongly associated with impaired glucose disposal. In conclusion, our study showed that both insulin sensitivity and impaired beta-cell function are associated with impaired glucose metabolism, and that beta-cell function may be more important in determining glucose disposal.