We have developed a method to isolate insulin-responsive human hepatocytes from an intraoperative liver biopsy to study insulin action and resistance in man. Hepatocytes from obese patients with noninsulin-dependent diabetes were resistant to maximal insulin concentration, and those from obese controls to submaximal insulin concentration in comparison to nonobese controls. Insulin binding per cell number was similar in all groups. However, insulin binding per surface area was decreased in the two obese groups because their hepatocytes were larger. In addition, the pool of detergent-extractable receptor was further decreased in diabetics. Insulin receptors in all groups were unaltered as determined by affinity-labeling methods. However, insulin-stimulated insulin receptor kinase activity was decreased in diabetics. Thus, in obesity, decreased surface binding could explain resistance to submaximal insulin concentrations. In diabetes, diminished insulin-stimulated protein kinase activity and decreased intracellular pool of receptors could provide an explanation for postinsulin-binding defect(s) of insulin action in human liver.