Defective carbohydrate metabolism is central to the pathogenesis of non-insulin-dependent diabetes mellitus (NIDDM) and impaired glucose tolerance (IGT). Plasma glucose concentrations are determined by a balance between glucose entry into and removal from the circulation. In non-diabetic individuals, an oral glucose load triggers a rapid insulin secretory response. Insulin suppresses hepatic glucose release and stimulates peripheral glucose uptake, thereby limiting the postprandial rise in plasma glucose concentration. In addition, the term 'glucose effectiveness' describes how glucose regulates its own metabolism. In individuals with NIDDM or IGT, the beta-cell response to glucose is impaired, the incretin effect is reduced, hepatic and peripheral tissues are resistant to insulin, and glucose effectiveness may be impaired. Furthermore, disturbances in free fatty acid metabolism may alter intracellular glucose metabolism. The relative contributions of these defects to postprandial hyperglycaemia remain to be determined. However, the defects in insulin secretion and insulin action are central to understanding diabetic and prediabetic states.