The assessment of pancreatic beta cell function in humans is challenging because of a complex interplay between insulin secretion, insulin sensitivity and hepatic insulin extraction. Simplified, the relationship between insulin secretion and insulin sensitivity can be described by an approximate hyperbola with the product of the two variables being constant for individuals with the same degree of glucose tolerance (the disposition index). Strengths and limitations of the disposition index have been widely debated in the literature. In this review we will focus on another and until recently unrecognized dimension of the disposition index, namely the issue of adjusting insulin secretion for hepatic versus peripheral insulin sensitivity. An underlying assumption of this issue is that the liver as compared to muscle plays a different role in the regulation of in vivo insulin secretion.