The molecular basis for the β-cell dysfunction that characterizes non-insulin-dependent diabetes mellitus (NIDDM) is unknown. The Zucker diabetic fatty (ZDF) male rat is a rodent model of NIDDM with a predictable progression from the prediabetic to the diabetic state. We are using this model to study β-cell function during the development of diabetes with the goal of identifying genes that play a key role in regulating insulin secretion and, thus, may be potential targets for therapeutic intervention aimed at preserving or improving β-cell function. As a first step, we have characterized morphology, insulin secretion, and pattern of gene expression in islets from prediabetic and diabetic ZDF rats. The development of diabetes was associated with changes in islet morphology, and the islets of diabetic animals were markedly hypertrophic with multiple irregular projections into the surrounding exocrine pancreas. In addition, there were multiple defects in the normal pattern of insulin secretion. The islets of prediabetic ZDF rats secreted significantly more insulin at each glucose concentration tested and showed a leftward shift in the dose-response curve relating glucose concentration and insulin secretion. Islets of prediabetic animals also demonstrated defects in the normal oscillatory pattern of insulin secretion, indicating the presence of impairment of the normal feedback control between glucose and insulin secretion. The islets from diabetic animals showed further impairment in the ability to respond to a glucose stimulus. Changes in gene expression were also evident in islets from prediabetic and diabetic ZDF rats compared with age-matched control animals. In prediabetic animals, there was no change in insulin mRNA levels. However, there was a significant 30–70% reduction in the levels of a large number of other islet mRNAs including glucokinase, mitochondrial glycerol-3-phosphate dehydrogenase, voltage-dependent Ca²⁺ and K⁺ channels, Ca²⁺-ATPase, and transcription factor Islet-1 mRNAs. In addition, there was a 40–50% increase in the levels of glucose-6-phosphatase and 12-lipoxygenase mRNAs. There were further changes in gene expression in the islets from diabetic ZDF rats, including a decrease in insulin mRNA levels that was associated with reduced islet insulin levels. Our results indicate that multiple defects in β-cell function can be detected in islets of prediabetic animals well before the development of hyperglycemia and suggest that changes in the normal pattern of gene expression contribute to the development of β-cell dysfunction.