More than 50% of Pima Indians develop NIDDM. This disorder is preceded by impaired glucose tolerance (IGT) and we tested the hypothesis that the elevated glucose levels in IGT must be due to reduced beta-cell function. We first determined the plasma glucose/plasma insulin and plasma insulin/insulin resistance relationships in individuals with NGT, relationships which by definition must be normal, and determined if these relationships were intact in individuals with IGT. We also compared Pimas and Caucasians with NGT or IGT. Subjects were assessed with an OGTT, an IVGTT, underwater weighing (for body composition), and a euglycaemic clamp. The results showed that insulin concentrations in Pimas with IGT were not lower than the levels predicted by the relationships found in subjects with NGT. Compared to Caucasians, Pima Indians had elevated insulin concentrations at the same degree of insulin resistance. These studies indicate that insulin resistance, and not beta-cell failure, is the principal lesion determining IGT in Pimas. NIDDM occurs when beta-cell failure develops in the presence of insulin resistance. In some individuals of other races, beta-cell function may be less able to withstand insulin resistance, and presumably in these individuals beta-cell failure assumes a greater importance in the evolution to NIDDM.