We investigated intracellular processing of the insulin-receptor complex in monocytes from 12 healthy control subjects, 11 obese nondiabetic subjects, and 13 obese patients with non-insulin-dependent diabetes mellitus (NIDDM) by measuring receptor internalization, recovery of cell-surface insulin binding after receptor internalization, and the release of intracellular intact insulin (insulin retroendocytosis). When monocytes from the three groups of subjects were exposed to 100 nM unlabeled insulin for 30 min at 37 degrees C, the subsequent cell-surface 125I-labeled insulin binding was reduced, but the total number of insulin receptors, measured by radioimmunoassay, was not changed. These findings indicate a redistribution of insulin receptors from the surface to the cell interior. Insulin-receptor internalization was significantly lower in monocytes of obese NIDDM patients (mean +/- SE 17.8 +/- 4.7%) than in obese subjects and healthy control subjects (33.5 +/- 4.5%, P less than .05, and 34.4 +/- 3.7%, P less than .02, respectively). Moreover, in downregulated cells, a complete recovery of the initial insulin binding was observed in control subjects but not in obese NIDDM patients or obese nondiabetic subjects. The release of internalized insulin was also reduced in obese NIDDM patients and obese subjects (t 1/2 = 49.0 +/- 2.4 min, P less than .02; 47.4 +/- 5.7 min, P less than .05; and 32.9 +/- 3.8 in NIDDM patients, obese subjects, and control subjects, respectively). In the radioactivity released from monocytes of obese subjects and obese NIDDM patients, the percentage of intact insulin was higher (P less than .05) than in control subjects, suggesting reduced intracellular insulin degradation in obese subjects and obese NIDDM patients.(ABSTRACT TRUNCATED AT 250 WORDS)