To explore the mechanisms for the insulin resistance associated with a family history of type 2 diabetes, we studied 16 healthy men with at least two first-degree relatives with type 2 diabetes and 16 control subjects without known heredity. They were pair-wise matched for age, body mass index, and fasting triglycerides and underwent an oral glucose tolerance test, iv glucose infusion to measure the early insulin secretion, euglycemic hyperinsulinemic clamp, computed tomography scan, 7-d food record, and a cardiopulmonary exercise test to measure peak oxygen uptake. Insulin sensitivity index was 30% lower (P = 0.02) in relatives, compared with controls, but fasting and 2-h blood glucose and first-phase insulin secretion were similar. There were no differences in mean fasting free fatty acid levels, amount of sc or visceral adipose tissue, or fat accumulation in the liver. Dietary intake and peak oxygen uptake were also similar. However, multiple regression analysis of both groups showed that fat in the liver and physical capacity were, like known heredity for type 2 diabetes, independent predictors of insulin sensitivity. Thus, lipid accumulation in the liver and physical capacity are related to insulin sensitivity, but neither of these factors nor the amount and distribution of the body fat can explain the insulin resistance associated with a family history for type 2 diabetes.