Fat biopsies from the lower abdominal wall were obtained from 13 insulin-treated type I diabetic subjects and from 12 age-, weight-, and sex-matched control subjects. Insulin binding and the antilipolytic effect of insulin were studied. Insulin binding was significantly reduced in the diabetic subjects (34% reduction at tracer binding, P less than 0.05) due to a decreased number of binding sites. In agreement with this, the dose-response curve for the antilipolytic effect of insulin was shifted to the right in the diabetic subjects. Furthermore, the maximal antilipolytic effect of insulin was also reduced (64%, P less than 0.05). Thus, fat cells from conventionally treated type I diabetic individuals are resistant to insulin. This resistance is due to a combination of a decreased number of insulin binding sites and an unspecified intracellular (postreceptor) defect involving the antilipolytic effect of insulin. These findings are in accord with recent in vivo studies showing that type I diabetic patients are also resistant to the stimulating effect of insulin on glucose disposal.