To assess the role of fasting plasma non-esterified fatty acids (NEFA) in the development of non-insulin-dependent diabetes mellitus (NIDDM), data were analysed from annual examinations of 190 non-diabetic Pima Indians. Glucose tolerance was measured by a 75-g oral glucose tolerance test, insulin action by a euglycaemic hyperinsulinaemic (40 mU · m⁻² · min⁻¹) clamp and in vitro lipolysis using isolated abdominal fat cells. After a mean follow-up period of 4.0±2.4 years (mean ± SD), 47 subjects developed NIDDM. Risk factors for NIDDM were estimated by proportional-hazards analysis and risk ratios (RR) with 95% confidence intervals (95% CI) calculated at the 90th and 10th percentile of the predictor variables. A large average fat-cell volume was predictive of NIDDM (RR=2.4; 95% CI=1.2–4.8) independent of age, sex, percent body fat and body fat distribution. A high fasting plasma NEFA concentration was also a risk factor for NIDDM (RR=2.3; 95% CI=1.1–4.7) independent of sex, percent body fat, waist/thigh ratio, insulin-mediated glucose uptake and fasting triglyceride concentration. We conclude that large fat cells and the resulting increased plasma NEFA concentrations are risk factors for the development of NIDDM.