We assessed the effects of weight loss on pancreatic secretion and hepatic extraction of insulin in 11 obese subjects with noninsulin-dependent diabetes mellitus. Weight loss of 15.4 +/- 2.0 kg (mean +/- SE) resulted in decreased fasting insulin [20.2 +/- 2.5 to 9.8 +/- 2.5 microU/mL (145 +/- 18 to 70 +/- 18 pmol/L); P less than 0.02] and C-peptide (850 +/- 80 to 630 +/- 110 pmol/L; P less than 0.05) levels. The plasma glucose response to oral glucose and iv glucagon was improved with unchanged peripheral insulin levels. When plasma glucose levels were matched to those before weight loss, peripheral serum insulin and plasma C-peptide responses to iv glucagon were increased and similar to those in obese nondiabetic subjects studied at euglycemia. The total insulin response (area under the curve) to iv glucagon was reduced 30% (P less than 0.005), while the total C-peptide response area did not change after weight loss. At matched hyperglycemia, the total response area was enhanced 72% for insulin (P less than 0.002) and 64% for C-peptide (P less than 0.001). Incremental (above basal) response areas after weight loss did not change for insulin, but increased 66% for C-peptide (P less than 0.05). The incremental areas were augmented nearly 2-fold (196%) for insulin (P less than 0.01) and 1.7-fold (173%) for C-peptide (P less than 0.01) when assessed at matched hyperglycemia. Both basal (7.3 +/- 0.5 to 14.1 +/- 1.8; P less than 0.01) and total stimulated (6.1 +/- 0.4 to 8.8 +/- 1.4; P less than 0.05) C-peptide to insulin molar ratios increased after weight loss. We conclude that after weight loss in noninsulin-dependent diabetes mellitus, 1) insulin secretion is decreased in the basal state but increased after stimulation; 2) changes in insulin secretion are reflected by peripheral levels of C-peptide but not insulin, due in part to enhanced hepatic insulin extraction; and 3) at matched levels of hyperglycemia insulin secretion is markedly increased and similar to that in obese nondiabetic subjects studied at euglycemia.