In summary, the present review provides evidence in support of the proposition that pancreatic islet cell hyperplasia precedes the development of insulin insensitivity in the obese mouse and, it is likely, that similar events occur in obese humans. Moreover, the hyperplastic pancreatic islet appears to be responsible for the development of insulin insensitivity, since suppression of the hyperplastic islet, by either alloxan or streptozotocin administration to the obese mouse, results in amelioration of insulin insensitivity in vivo. Since no change occurred in the degree of obesity or in adipocyte cell size or number, it is evident that insulin sensitivity is independent of obesity per se. Hence, although obesity and insulin insensitivity frequently co-exist, insulin insensitivity is independent of obesity and is due rather to the presence of pancreatic islet cell hyperplasia. Light and electron microscopy of the hyperplastic pancreatic islets of the obese mouse reveal increased numbers of A- B- and D-cells. Islet suppression with alloxan or streptozotocin results in the selective reduction of B-cells with preservation of A- and D-cells. Therefore, restoration of insulin sensitivity in the obese mouse following pancreatic islet cell suppression appears to be directly related to suppression of B-cell hypersecretion. Biochemical studies of muscle and adipose tissues from the obese mouse reveal profound insulin unresponsiveness without clear cut improvement in vitro following pancreatic islet cell suppression and restoration of insulin sensitivity in vivo. These data are consistent with a relatively modest reduction in the number of available insulin receptors upon these tissues in relation to the marked insulin resistance and imply an impairment of insulin action beyond the insulin receptor interaction [either transport or intracellular action(s)] as the major site(s) of insulin resistance in the muscle and adipose tissues of obese mice. Conversely a reduction of insulin receptors upon hepatocytes of obese mice and their improvement following a reduction of B-cell hypersecretion support the proposition that the number of available insulin receptors may be the major site for the regulation of insulin action upon that tissue. Finally, evidence is presented which suggests that an inability of insulin to limit hepatic gluconeogenesis may be the predominant cause of insulin insensitivity in the obese mouse.