The frequency of non-insulin-dependent diabetes mellitus (NIDDM) and of high blood pressure (or hypertension) is higher in some ethnic groups than in others for reasons that remain unclear. To investigate the mechanisms leading to these ethnic differences, plasma C-peptide and insulin concentrations were measured after overnight fast and during an oral glucose tolerance test in subjects aged 45-74 years sampled from the practice lists of two north west London health centres. Ethnic group was defined by grandparental origin as Afro-Caribbean in 106, Gujerati Indian in 107, and white European in 101. The total age-adjusted prevalence of NIDDM was 29% in the Afro-Caribbean, 30% in the Gujerati, and 3% in the white groups, respectively. Fasting C-peptide and insulin concentrations increased from the subgroup with normal glucose tolerance, through impaired glucose tolerance, to new NIDDM, and were lower again in subjects with known NIDDM. The odds ratio for new NIDDM was 1.87 (95% confidence interval 1.26-2.77) per 1 SD increase in fasting C-peptide, which was the most powerful independent indicator of new NIDDM (p = 0.0005) and accounted for the effect of ethnic group. Fasting insulin had a similarly strong effect. There was no relation between any index of insulin secretion and blood pressure or hypertension. There were differences among the ethnic groups in the C-peptide response relative to the insulin response. These results suggest that factors determining insulin secretion and its hepatic clearance, possibly including dietary fat, are the main causes of ethnic variation in rates of new NIDDM.