Extensive investigations of the pathophysiology of non-insulin-dependent diabetes mellitus (NIDDM) have identified two defects in endocrine function: insulin resistance and insulin deficiency. Despite general agreement that both defects are present in most patients with established NIDDM, many authorities have debated the question of which defect is the primary cause of NIDDM. Many interesting physiological studies have been conducted in an effort to address the following questions: Which defect can be detected earliest in the course of the disease? Which defect is more important in the pathogenesis of NIDDM? These clinical investigations have provided valuable insights into the pathophysiology of NIDDM. However, like many productive scientific investigations, they have raised as many questions as they have answered. Fortunately, after years of spirited debate, methods are becoming available that are likely to resolve the controversy. Genetic factors contribute importantly to the predisposition to develop NIDDM. Nevertheless, abundant evidence suggests that environmental factors (eg, nutrition, physical exercise, etc.) may also modulate the expression of the diabetic phenotype.(Such interactions between genetics and the environment are commonly observed in many genetic diseases. For example, patients with mild forms of glucose-6-phosphate dehydrogenase deficiency are usually asymptomatic unless they are exposed to environmental stresses [eg, administration of certain drugs, infections, etc.].) Inasmuch as NIDDM is a genetic disease, the identity of the cause of the disease is encrypted in the sequence of nucleotides in the patients' DNA. To learn the secret of the disease, we need to decipher the code. With the development of powerful methods of molecular genetic analysis, the time is rapidly approaching when identification of the primary genetic defects that render an individual susceptible to NIDDM will be possible. In this perspective, we review the evidence supporting the balanced view that both insulin resistance and insulin deficiency contribute to the pathogenesis of NIDDM but that the relative importance of each factor may vary from patient to patient. Before attempting to discuss the more controversial areas, we will begin by reviewing the points about which there is general agreement.