To examine the natural course of insulin action in Type I diabetes, we followed 15 patients prospectively for one year after the diagnosis of diabetes and also performed a cross-sectional study of 53 additional patients who had had diabetes for 2 to 32 years. Two weeks after diagnosis, the rate of glucose uptake during hyperinsulinemia, a measure of insulin action, was 32 percent lower in the patients with diabetes than in 30 matched normal subjects (P less than 0.01), but it rose to normal during the subsequent three months. At three months after diagnosis, 9 of 21 patients (43 percent) were in clinical remission and did not require insulin therapy. In these patients, insulin action was 40 percent greater (P less than 0.002) than in the patients who continued to need insulin treatment. Fasting plasma C-peptide levels were slightly but not significantly higher in the patients who had a remission than in the other patients. In patients who had had diabetes for one year or more, insulin action was also reduced by an average of 40 percent (although there was considerable variation between patients), and it was inversely related to glycemic control and relative body weight. Thus, in patients with newly diagnosed Type I diabetes, a transient normalization of insulin action may occur after an initial reduction, along with a partial recovery of endogenous insulin secretion, and these events may contribute to the development of a clinical remission ("honeymoon" period). A majority of patients with diabetes of long duration are characterized by varying degrees of insulin resistance.