Type 2 diabetes mellitus is characterised by resistance of peripheral tissues to insulin and a relative deficiency of insulin secretion. To find out which is the earliest or primary determinant of disease, we used a minimum model of glucose disposal and insulin secretion based on intravenous glucose tolerance tests to estimate insulin sensitivity (SI), glucose effectiveness (ie, insulin-independent glucose removal rate, SG), and first-phase and second-phase beta-cell responsiveness in normoglycaemic offspring of couples who both had type 2 diabetes. 155 subjects from 86 families were followed-up for 6-25 years. More than 10 years before the development of diabetes, subjects who developed the disease had lower values of both SI (mean 3.2 [SD 2.4] vs 8.1 [6.7] 10(-3) I min-1 pmol-1 insulin; p < 0.0001) and SG (1.6 [0.9] vs 2.3 [1.2] 10(-2) min-1, p < 0.0001) than did those who remained normoglycaemic). For the subjects with both SI and SG below the group median, the cumulative incidence of type 2 diabetes during the 25 years was 76% (95% confidence interval 54-99). By contrast, no subject with both SI and SG above the median developed the disease. Subjects with low SI/high SG or high SI/low SG had intermediate risks. Insulin secretion, especially first phase, tended to be increased rather than decreased in this prediabetic phase and was appropriate for the level of insulin resistance. The development of type 2 diabetes is preceded by and predicted by defects in both insulin-dependent and insulin-independent glucose uptake; the defects are detectable when the patients are normoglycaemic and in most cases more than a decade before diagnosis of disease.