Here we report that free fatty acid-induced suppression of insulin output in prediabetic Zucker diabetic fatty (ZDF) rats is mediated by NO. When normal islets were cultured in 2 mM FFA, NO production and basal insulin secretion increased slightly. In cultured prediabetic ZDF islets, FFA induced a fourfold greater rise in NO, upregulated mRNA of inducible nitric oxide synthase (iNOS), and reduced insulin output; both nicotinamide and aminoguanidine, which lower NO, prevented the FFA-mediated increase in iNOS mRNA, reduced NO, and minimized the loss of insulin secretion. In vivo nicotinamide or aminoguanidine treatment of prediabetic ZDF rats prevented the iNOS expression in islets and decreased beta cell dysfunction while blocking beta cell destruction and hyperglycemia. We conclude that NO-lowering agents prevent adipogenic diabetes in obese rats.