Well-characterized defects in insulin secretion, most notably a loss of glucose-induced insulin secretion, are found in virtually all forms of NIDDM, as well as in early IDDM. Similar abnormalities have been found in all animal models of diabetes in which they have been studied. A novel hypothesis is being proposed to explain the mechanisms responsible for these alterations. Many abnormalities in the various steps of glucose-induced insulin secretion have been identified in rodent models of diabetes, but none by itself seems sufficient to explain the defects. These include a loss of GLUT2, glycogen accumulation, glucose recycling, abnormal glucokinase or hexokinase, altered mitochondrial glycerol phosphate dehydrogenase (mGPDH) activity, abnormal ion channel function and beta cell degranulation. We propose that optimal secretory function is dependent upon the unique differentiation of beta cells that is maintained by a set of transcription factors and that this control is disrupted by the diabetic state. Therefore, we propose that key transcription factors are affected even when beta cells are stressed by insulin resistance in very earliest stages of diabetes and that the abnormality becomes more severe as full-blown diabetes develops, which leads to loss of beta cell differentiation and a resultant derangement of insulin secretion.