Non-insulin-dependent diabetes (NIDDM) is characterized by overproduction of glucose, decreased effects of insulin on glucose utilization and production, and a defect in glucose-induced insulin secretion. NIDDM is also associated with defects in fatty acid metabolism, i.e. enhanced lipolysis and impaired suppression of adipose tissue lipolysis in response to insulin, and increased plasma free fatty acid levels. It has been suggested that the "glucose-fatty acid cycle" is enhanced in NIDDM and could contribute to disturbed glucose homeostasis. Although the use of intralipid + heparin infusion and inhibitors of lipolysis or fatty acid oxidation indicates that the glucose-fatty acid cycle exists both in normal and NIDDM subjects, it does not seem to be the primary cause of distributed glucose homeostasis in lean NIDDM subjects or their first-degree relatives. However, the glucose-fatty acid cycle could contribute to overproduction of glucose (by stimulating gluconeogenesis) and muscle insulin resistance in obese NIDDM subjects. Studies performed in the rat suggest that impaired glucose-induced insulin secretion could also be related to chronic exposure of pancreatic beta cells to elevated plasma free fatty acid levels. The role of the glucose-fatty acid cycle in normal subject must be clarified, and its contribution to decreased glucose-induced insulin secretion in NIDDM requires further investigation.