It has been debated for the past two decades whether non-insulin-dependent diabetes mellitus (NIDDM) is caused by insulin deficiency or insulin resistance. In this review we summarise the data which unequivocally indicate that insulin response to glucose is grossly deficient in patients with impaired glucose tolerance and NIDDM. Furthermore, we review the findings for Psammomys obesus (the sand rat), an animal with spontaneous obesity, insulin resistance and diabetes which has been used as the prototype for "hyperinsulinaemic NIDDM". A large proportion of circulating insulin in this animal consists of proinsulin and its split products, apparently resulting from hyperglycaemia-driven overstimulation of the beta cell, with depletion of its insulin stores. In vitro studies demonstrate that this "glucose toxic" effect can be reproduced in Psammomys islets but not in those of normal rats. This would indicate that increased demand for insulin production leads to aberrations in proinsulin production and processing only in beta cells with inherent (genetic?) defects. We also point to clinical findings which cast doubt on the practical importance of insulin resistance for the glucose homeostasis of NIDDM patients. In these cases, moderate doses of insulin administered by insulin pumps can induce near-normoglycaemia in NIDDM.