In vivo studies indicate that patients with NIDDM have defects in both insulin secretion and insulin action. The decrease in insulin action is due to both hepatic and extrahepatic insulin resistance. The impairment in glucose uptake is associated with alterations in both oxidative and nonoxidative disposal. Defective glucose transport may limit both of these processes. NIDDM also is associated with increased concentrations and rates of oxidation of plasma free fatty acids. Insulin resistance appears to be familial and in at least some individuals antedates glucose intolerance. In vitro studies indicate that insulin resistance can involve a variety of insulin sensitive tissues including adipocytes, muscle and liver. While most studies note that insulin binding and insulin receptor kinase activity are decreased in insulin sensitive tissues in obese patients with NIDDM, further delineation of the contribution of obesity and diabetes is required. Alterations in glucose transporter number and function likely account at least in part for impaired glucose transport. The cause of the alterations in other insulin responsive pathways and the role of an abnormal metabolic milieu versus intrinsic cellular defects remain to be established.