High concentrations of nonesterified fatty acids (NEFA) are a risk factor for developing type 2 diabetes in Pima Indians. In vitro and in vivo, chronic elevation of NEFA decreases glucose-stimulated insulin secretion. We hypothesized that high fasting plasma NEFA would increase the risk of type 2 diabetes by inducing a worsening of glucose-stimulated insulin secretion in Pima Indians. To test this hypothesis, fasting plasma NEFA concentrations, body composition, insulin action (M), acute insulin response (AIR, 25-g IVGTT), and glucose tolerance (75-g OGTT) were measured in 151 Pima Indians [107 normal glucose tolerant (NGT), 44 impaired glucose tolerant (IGT)] at the initial visit. These subjects, participants in ongoing studies of the pathogenesis of obesity and type 2 diabetes, had follow-up measurements of body composition, glucose tolerance, M, and AIR. In NGT individuals, cross-sectionally, high fasting plasma NEFA concentrations at the initial visit were negatively associated with AIR after adjustment for age, sex, percent body fat, and M (P = 0.03). Longitudinally, high fasting plasma NEFA concentrations at the initial visit were not associated with change in AIR. In individuals with IGT, cross-sectionally, high fasting plasma NEFA concentrations at the initial visit were not associated with AIR. Longitudinally, high fasting plasma NEFA concentrations at the initial visit were associated with a decrease in AIR before (P< 0.0001) and after adjustment for sex, age at follow-up, time of follow-up, change in percent body fat and insulin sensitivity, and AIR at the initial visit (P = 0.0006). In conclusion, findings in people with NGT indicate that fasting plasma NEFA concentrations are not a primary etiologic factor for β-cell failure. However, in subjects who have progressed to a state of IGT, chronically elevated NEFA seem to have a deleterious effect on insulin-secretory capacity.