To determine whether the genetic predisposition towards Type 2 diabetes was associated with a defect in either islet-cell function or insulin action, 12 non-diabetic offspring each of whose parents both had Type 2 diabetes were studied, together with 12 control subjects matched for age, sex, and weight. Fasting plasma glucose was higher in the offspring (5.5 +/- 0.1 mmol l-1 (mean +/- SE)) than in the matched controls (5.1 +/- 0.1 mmol l-1) (p less than 0.05). Using an IVGTT insulin sensitivity was not significantly lower in the offspring compared with their controls (3.1 +/- 0.5 vs 3.8 +/- 1.0 min-1 mU-1 l 10(-4)). There was no significant difference in any of the measures of insulin secretion (first- and second-phase response to IV glucose, slope of glucose potentiation, and maximal glucose regulated insulin secretory capacity). Glucagon secretion measured before and after a stimulus of IV arginine at varying plasma glucose concentrations was virtually identical in the offspring and their controls. Among a total of 28 non-diabetic subjects of differing body-weights there was a significant inverse relationship between insulin sensitivity and insulin secretion. When adjusted for their generally lower insulin sensitivity, maximal insulin secretory capacity was reduced in the offspring (p = 0.038, one-tailed t-test). The results suggest that the genetic predisposition to Type 2 diabetes is not associated in young adults with any major pre-morbid impairment in insulin secretion or insulin action but the relationship between the two may be abnormal. Islet A-cell function appears to be normal.