Type 2 diabetes mellitus is a heterogeneous disorder characterized by varying degrees of impaired insulin secretion and insulin resistance. The metabolic manifestations of insulin resistance include (1) reduced insulin-stimulated glucose uptake, (2) reduced insulin-suppression of endogenous glucose production, and (3) reduced antilipolysis. All of these mechanisms contribute to the hyperglycemis of T2DM, both post-absorptively and postprandially. In addition, insulin resistance is involved in decreaswed insulin-induced vasodilation, dyslipidemia, and platelet hyperaggregability. The pathogenesis of T2DM involves a combination of genetic and environmental factors. Monogenic causes account for only a minority of insulin resistance and beta cell dysfunction. Among environmental factors the most important are obesity, reduced physical activity, and age. Obesity-associated insulin resistance is thought to be mediated mainly by FFAs whose clearance is reduced in subjects with T2DM. A number of clinical tests have been developed to assess insulin sensitivity and beta cell function in vivo. The euglycemic hyperinsulinemic clamp and the hyperglycemic clamp, respectively, represent the gold standard procedures. Recently, indices calculated parameters of the OGTT have been proposed as surrogates for assessing both insulin sensitivity and beta cell function in clinical situations and epidemiologic studies.