Upon release into circulation, the potent insulin secretagogues glucose-dependent insulinotropic polypeptide (GIP) and glucagon-like peptide-1 (GLP-1) are rapidly cleaved and inactivated by the enzyme dipeptidyl peptidase IV (DP IV). Long-term administration of specific DP IV inhibitors, so as to enhance circulating active GIP and GLP-1 levels, has been shown to improve glucose tolerance and beta-cell glucose responsiveness and to reduce hyperinsulinemia in the Vancouver diabetic fatty (VDF) rat model of type 2 diabetes. Using the VDF model, the current study was undertaken to examine the effects of long-term DP IV inhibitor treatment on insulin sensitivity. Euglycemic-hyperinsulinemic clamps were performed on two sets of conscious VDF rats treated with or without the DP IV inhibitor P32/98 (20 mg. kg(-1). day(-1) for 12 weeks). The protocol consisted of three sequential 90-min periods with insulin infusion rates of 0, 5, and 15 mU. kg(-1). min(-1) and included a constant infusion of [ (3)H]glucose for measure of hepatic and peripheral insulin sensitivity. Relative to untreated littermates, the treated animals showed a left shift in the sensitivity of hepatic glucose output to insulin (average reduction approximately 6 micro mol. kg(-1). min(-1)) and a marked gain in peripheral responsiveness to insulin, with glucose disposal rates increasing 105 and 216% in response to the two insulin steps (versus 2 and 46% in controls). These results provide the first demonstration of improved hepatic and peripheral insulin sensitivity after DP IV inhibitor therapy, and coupled with apparent improvements in beta-cell function, they offer strong support for the utility of these compounds in the treatment of diabetes.