Preservation of endogenous insulin in insulin-dependent diabetes mellitus (IDDM) may prevent the occurrence of diabetes-related complications. Therefore, it is important to known about insulin reserve and insulin sensitivity at clinical manifestation. Twenty-four patients (aged 23 +/- 6 years) were evaluated for 2 years starting at the day of clinical manifestation. Insulin secretion was stimulated by glucagon, arginine, and glucose on separate days. Insulin sensitivity was evaluated by hyperinsulinemic-euglycemic clamp. Two control groups were established, one consisting of age-, weight-, and sex-matched healthy individuals, the other of patients with diabetes of long duration (6 to 13 years). Sensitivity improved from 30% of normal at baseline to 84% after only 2 weeks in the newly manifested patients. Subsequently, insulin released by nonglucose stimuli increased by 75%. Glucose-induced first-phase insulin secretion did not recover. After 2 years, sensitivity was 20% less than normal and glucagon-stimulated C-peptide (GSCP) was 0.64 +/- 0.20 nmol/L (0.41 +/- 0.19 at baseline, P < .002). Insulin sensitivities in euglycemic and hyperglycemic conditions were closely correlated. In conclusion, improvement of insulin sensitivity precedes and is possibly a prerequisite for the recovery of residual insulin in early IDDM.