1. To determine the effects of gene dilution on development of IGT, NIDDM and in vitro glucose oxidation, heterozygous lean LA/N-cp female and SHR/N-cp male rats were mated, and F1 offspring studied at periodic intervals to determine the prevalence of obese and diabetic traits. 2. Obesity occurred in 25% of offspring by 5 weeks of age, consistent with inheritance of the autosomal recessive cp trait. 3. IGT occurred in all obese male F1, 67% of obese female F1, and 18% of the lean male F1 rats by 5 months of age, and diabetes occurred in 80% of male obese and 17% of female obese rats from 6 months of age. Glycosuria occurred with glucose intolerance, and was more severe in rats with NIDDM than IGT. 4. Rates of in vitro glucose oxidation were greater in diaphragm and adipose tissue, and were greater in the presence of insulin (100 mu Units/ml) in obese female but not obese male F1 rats. 5. These results indicate that the development of glucose intolerance is more prominent in male than in female F1 rats, that the progression of IGT to NIDDM occurs later in life in the F1 hybrid than in the SHR/N-cp strain from which the diabetic trait was transmitted, and that genetic dilution of the diabetic trait via hybrid breeding results in a delay in the expression of NIDDM which is chronologically more similar to that which occurs in man.