The purpose of this study was to examine the response of pancreatic beta-cells to changes in insulin sensitivity in women at high risk for type 2 diabetes. Oral glucose tolerance tests (OGTTs) and frequently sampled intravenous glucose tolerance tests (FSIGTs) were conducted on Latino women with impaired glucose tolerance and a history of gestational diabetes before and after 12 weeks of treatment with 400 mg/day troglitazone (n = 13) or placebo (n = 12). Insulin sensitivity was assessed by minimal model analysis, and beta-cell insulin release was assessed as acute insulin responses to glucose (AIRg) and tolbutamide (AIRt) during FSIGTs and as the 30-min incremental insulin response (30-min dINS) during OGTTs. Beta-cell compensation for insulin resistance was assessed as the product (disposition index) of minimal model insulin sensitivity and each of the 3 measures of beta-cell insulin release. In the placebo group, there was no significant change in insulin sensitivity or in any measure of insulin release, beta-cell compensation for insulin resistance, or glucose tolerance. Troglitazone treatment resulted in a significant increase in insulin sensitivity, as reported previously. In response, AIRg did not change significantly, so that the disposition index for AIRg increased significantly from baseline (P = 0.004) and compared with placebo (P = 0.02). AIRt (P = 0.001) and 30-min dINS (P = 0.02) fell with improved insulin sensitivity during troglitazone treatment, so that the disposition index for each of these measures of beta-cell function did not change significantly from baseline (P > 0.20) or compared with placebo (P > 0.3). Minimal model analysis revealed that 89% of the change from baseline in insulin sensitivity during troglitazone treatment was accounted for by lowered plasma insulin concentrations. Neither oral nor intravenous glucose tolerance changed significantly from baseline or compared with placebo during troglitazone treatment. The predominant response of beta-cells to improved insulin sensitivity in women at high risk for type 2 diabetes was a reduction in insulin release to maintain nearly constant glucose tolerance.