The mechanisms of the diminished hypoglycemic response to insulin in non-insulin-dependent diabetes mellitus (NIDDM) with normal levels of circulating plasma insulin were investigated. Specific binding of mono-125I (Tyr A14)-insulin to isolated adipocytes and effects of insulin (5--10,000 microunits/ml) on glucose oxidation and lipolysis were determined simultaneously in subcutaneous adipose tissue of seven healthy subjects of normal weight and seven untreated NIDDM patients with normal plasma insulin levels. The two groups were matched for age, sex, and body weight. Insulin binding, measured in terms of receptor number and affinity, was normal in NIDDM, the total number of receptors averaging 350,000 per cell. Neither sensitivity nor the maximum antilipolytic effect of insulin was altered in NIDDM patients as compared with control subjects; the insulin concentration producing half the maximum effect (ED50) was 10 microunits/ml. As regards the effect of insulin on glucose oxidation, for the control subjects ED50 was 30 microunits/ml, whereas in NIDDM patients, insulin exerted no stimulatory effect. The results obtained suggest that the effect of insulin on glucose utilization in normoinsulinemic NIDDM may be diminished in spite of normal insulin binding to receptors. The resistance may be due solely to postreceptor defects, and does not involve antilipolysis.