Obesity and Type 2 (non-insulin-dependent) diabetes mellitus are common in the Mexican American population. It is not clear whether this is merely a specific instance of the more general phenomenon of excess Type 2 diabetes and obesity among poor people, or whether Mexican Americans have a discrete genetic susceptibility to Type 2 diabetes. The latter consideration arises because Mexican Americans are of mixed native American and European ancestry and native Americans may have a genetic predisposition to Type 2 diabetes which Mexican Americans could share. We studied 936 Mexican Americans and 398 Anglo-Americans randomly selected from three socially and culturally distinct neighborhoods in San Antonio, Texas. Three categories of obesity--lean, average, and obese--were defined using the Anglo-American distribution of the sum of the triceps and subscapular skinfold. Mexican Americans were two to four times as likely to fall into the obese category as Anglo-Americans, but within categories, the two ethnic groups were closely matched in terms of sum of skinfolds. The prevalence of Type 2 diabetes, however, was significantly greater in Mexican Americans than in Anglo-Americans even when the comparisons were made within the three obesity categories. The summary prevalence ratio, controlling for obesity, was 2.54 for men (p = 0.004) and 1.70 for women (p = 0.036). Thus, lean Mexican Americans are still at greater risk of Type 2 diabetes than equally lean Anglo-Americans. Conversely, although Type 2 diabetes prevalence increases as expected with increasing obesity in both ethnic groups, obese Anglo-Americans are still relatively protected compared with equally obese Mexican Americans. Plasma glucose was significantly higher in Mexican Americans than in Anglo-Americans even after controlling for obesity. These results indicate that, although obesity contributes to Type 2 diabetes in Mexican Americans, it does not by itself explain the entire excess prevalence rate.