The purpose of this study was to identify the relationship between basal hepatic glucose production (HGP) and peripheral insulin sensitivity as assessed by the hyperinsulinemic euglycemic clamp prior to and during the development of non-insulin-dependent (type 2) diabetes mellitus in rhesus monkeys. Twenty-six male monkeys (Macaca mulatta), including normal animals and monkeys in various phases of the development of spontaneous obesity-associated type 2 diabetes were studied. Fasting plasma glucose (FPG) and insulin (FIRI), basal HGP using a [3H]glucose infusion, and peripheral insulin sensitivity (as determined by the euglycemic clamp technique) were examined. The earliest change that could be detected was a significant reduction in peripheral insulin sensitivity accompanied by increased FIRI. These changes preceded a significant deterioration of glucose tolerance. Basal HGP changed in parallel with FPG (r = 0.90, P less than 0.001), becoming significantly elevated only when FPG rose to levels diagnostic of diabetes (greater than 140 mg/dl). Thus basal HGP and fasting glucose levels showed no significant changes early in the development of type 2 diabetes. We conclude that the early serial decreases in insulin sensitivity and progressive increases in FIRI, with or without decreased glucose tolerance, are prognostic of the future development of diabetes in obese monkeys, a longitudinal process that is also likely to be observed in most if not all obese humans progressing to diabetes.