It has been suggested that the insulin resistance of non-insulin-dependent diabetes mellitus (NIDDM) may be caused by substrate competition between glucose and free fatty acids (FFAs) (Randle's cycle). We measured substrate oxidation and energy metabolism in 10 nonobese untreated NIDDM patients with fasting glucose levels of 7-8 mM with indirect calorimetry in the basal state and during an isoglycemic-hyperinsulinemic (approximately 100 mU/L) clamp without (control) and with a concomitant infusion (approximately 0.35 mmol/min) of Intralipid, a triglyceride emulsion. In the control study, fasting rates of total glucose turnover [( 3-3H]glucose) and glucose and lipid oxidation (9.4 +/- 1.4, 7.3 +/- 1.3, and 3.0 +/- 0.4 mumol.kg-1.min-1, respectively) were comparable with those of nondiabetic individuals. After insulin administration, lipid oxidation was normally suppressed (to 1.3 +/- 0.3 mumol.kg-1.min-1, P less than 0.01), as were the circulating levels of FFA, glycerol, and beta-hydroxybutyrate, whereas glucose oxidation doubled (14.1 +/- 1.8 mumol.kg-1.min-1, P less than 0.01). Because glycemia was clamped at 7.5 mM, endogenous glucose production (EGP) was completely suppressed, and total glucose disposal was stimulated (to 25.7 +/- 5.2 mumol.kg-1.min-1, P less than 0.01 vs. baseline), but glucose clearance (3.6 +/- 0.8 ml.kg-1.min-1) was 30% reduced compared with normal. With concomitant lipid infusion, FFA, glycerol, and beta-hydroxybutyrate all rose during the clamp; correspondingly, lipid oxidation was maintained at fasting rates (3.6 +/- 0.2 mumol.kg-1.min-1, P less than 0.01 vs. control).(ABSTRACT TRUNCATED AT 250 WORDS)