NIDDM patients with overt fasting hyperglycemia are characterized by multiple defects involving both Insulin secretion and insulin action. At this point of the natural history of NIDDM, however, it is difficult to establish which defects are primary and which are acquired secondary to insulinopenia and chronic hyperglycemia. To address this question, we have studied the glucose-tolerant offspring (probands) of two Mexican-American NIDDM parents. Such individuals are at high risk for developing NIDDM later in life. The probands are characterized by hyperinsulinemia in the fasting state and in response to both oral and Intravenous glucose. Insulin-mediated glucose disposal (insulin clamp technique), measured at two physiological levels of hyperinsulinemia (∼240 and 450 pM [∼40 and 75 μU/ml]), was reduced by 43 and 33%, respectively. During both the low- and high-dose insulin clamp steps, impaired nonoxidative glucose disposal, which primarily represents glycogen synthesis, was the major defect responsible for the Insulin resistance. During the lower dose insulin clamp step only, a small decrease in glucose oxidation was observed. No defect in suppression of HGP by insulin was demonstrable. The ability of insulin to inhibit lipid oxidation (measured by indirect calorimetry) and plasma FFA concentration was impaired at both levels of hyperinsulinemia. These results indicate that the glucose-tolerant offspring of two NIDDM parents are characterized by hyperinsulinemia and manifest all of the metabolic abnormalities that characterize the fully established diabetic state, including insulin resistance, a major impairment in nonoxidative glucose disposal, a quantitatively less important defect in glucose oxidation, and a diminished insulin-mediated suppression of lipid oxidation and plasma FFA concentration.