Many patients with type 2 diabetes have hyperglycemia as a result of deficiencies in both insulin secretion and insulin action, that is, β-cell dysfunction and insulin resistance. Insulin resistance is a state of reduced insulin sensitivity, an inability of insulin to lower plasma glucose levels through suppression of hepatic glucose production and stimulation of glucose utilization in skeletal muscle and adipose tissue. Insulin resistance stems from genetic and environmental causes, and its extent varies considerably among individuals. Studies have shown that enhanced insulin secretion can compensate for insulin resistance and that enhanced insulin sensitivity can mask defects in β-cell function. However, insulin resistance is essential to the development of the majority of cases of type 2 diabetes. Numerous epidemiologic studies have demonstrated an increase in the prevalence of insulin resistance and type 2 diabetes in various ethnic populations that have migrated from their native lands to more urbanized and westernized regions of the world. Type 2 diabetes has already reached epidemic proportions worldwide. By 2025, an estimated 300 million people will have diabetes, most of whom will inhabit China, India, and the United States. These studies have also demonstrated the complex interrelationship of hyperinsulinemia, obesity (primarily visceral adiposity), and free fatty acids with β-cell dysfunction, insulin resistance, and the development of type 2 diabetes. Although little can be done to avert a genetic predisposition to type 2 diabetes, normoglycemia can be preserved in individuals who remain insulin sensitive. Lifestyle changes can be implemented and medications can be administered to improve insulin sensitivity, insulin secretion, and glucose utilization and reduce the prevalence of type 2 diabetes.