We review evidence that increased tissue levels of fatty acyl CoA cause the beta-cell abnormalities of nondiabetic obesity and ultimately result in obesity-dependent diabetes. Nondiabetic obesity in Zucker rats is characterized by hypersecretion of insulin at normal fasting and subfasting glucose concentrations. This is a result of beta-cell hyperplasia and increased low Km glucose usage and oxidation. These abnormalities, the hyperinsulinemia, the hyperplasia of beta-cells, i.e., its in vitro equivalent, enhanced bromodeoxyuridine incorporation, and the increased low Km glucose usage can be induced by culturing normal islets with 2 mmol/l free fatty acids (FFAs). Once obese Zucker diabetic fatty rats become diabetic, glucose-stimulated insulin secretion (GSIS) is absent and beta-cell GLUT2 reduced. Islet triglyceride (TG) content is increased 10-fold, probably reflecting increased FFA delivery (plasma FFA levels > 1.5 mmol/l) beginning about 2 weeks before the onset of diabetes. These beta-cell abnormalities, GSIS loss, GLUT2 loss, and TG accumulation, are prevented by reducing plasma FFAs by caloric restriction and by nicotinamide injection. The loss of GSIS and the accumulation of TGs, but not the GLUT2 loss, can be induced in vitro in normal islets cultured in a 2 mmol/l FFA-containing medium, but prediabetic islets seem far more vulnerable to FFA-induced functional impairment and TG accumulation. It is proposed that in uncomplicated obesity, increased lipid availability (FFA levels < 1.5 mmol/l) induces both hyperinsulinemia and insulin resistance in parallel fashion, thereby maintaining normoglycemia.(ABSTRACT TRUNCATED AT 250 WORDS)