The relative importance of insulin resistance and abnormal insulin secretion as risk factors for the development of impaired glucose tolerance (IGT) is controversial. Few prospective data are available on metabolic precursors of IGT. We examined the relation of fasting serum insulin level (as a marker of insulin resistance) and change in insulin/glucose ratio (delta I30/ delta G30) over the first 30 min after glucose ingestion (as a marker of insulin secretion) as predictors of the 7-year development of IGT in 839 Mexican Americans and non-Hispanic whites with normal glucose tolerance at baseline from the San Antonio Heart Study. IGT eventually developed in 148 subjects. When modelled separately, fasting serum insulin (odds ratio (OR) = 2.60, 95% confidence interval (CI) = 1.58, 4.28, p < 0.005), but not delta I30/ delta G30 (OR = 0.80, 95% CI = 0.50, 1.27, p = 0.339) predicted the development of IGT. However, when both variables were included in the same logistic regression model, fasting serum insulin (OR = 3.50, 95% CI = 1.97, 6.21, p < 0.001) and low delta I30/ delta G30 (OR = 0.48, 95% CI = 0.28, 0.82, p = 0.008) both predicted IGT. These results were basically unchanged after further adjustment for obesity, body fat distribution and fasting plasma glucose level. We conclude that both decreased insulin secretion (as assessed by low delta I30/ delta G30) and increased insulin resistance (as assessed by fasting serum insulin) predict the development of IGT and are thus early precursors of non-insulin-dependent diabetes mellitus; further studies of insulin secretion should take into account the level of basal insulin resistance.