In order to investigate the mechanism of amelioration of metabolic abnormalities with supplementary doses of insulin, islet B-cell function and insulin sensitivity were measured in 10 patients with Type 2 diabetes in secondary failure to oral agents. A small dose of ultralente insulin (0.26 +/- 0.07 U kg-ideal-body-weight-1) was added in the morning before breakfast. After 3 months insulin therapy and progressive improvement of metabolic control (HbA1 from 10.5 +/- 0.4 to 9.0 +/- 0.3% at the end of insulin treatment, p less than 0.001), basal C-peptide and incremental area during an oral glucose tolerance test were unchanged. In vivo peripheral insulin sensitivity (euglycaemic clamp with insulin infusion of 40, 160, and 600 mU m-2 min-1, respectively) was significantly improved (glucose requirement: to 4.7 +/- 1.0 from 3.0 +/- 0.6 mg kg-1 min-1, p less than 0.05 at first insulin level; to 10.8 +/- 0.5 from 9.3 +/- 0.7 mg kg-1 min-1, p less than 0.01 at second level; to 13.3 +/- 0.6 from 11.8 +/- 0.8 mg kg-1 min-1, p less than 0.025 at third level). Basal hepatic glucose production was also significantly reduced (from 4.3 +/- 0.4 to 3.3 +/- 0.3 mg kg-1 min-1, p less than 0.05), and residual glucose production further suppressed after insulin supplement (from 1.1 +/- 0.4 to 0.3 +/- 0.2 mg kg-1 min-1 after 120 min at 100 mU l-1 plasma insulin, p less than 0.05). Specific insulin binding to mononuclear leucocytes was unchanged (from 3.1 +/- 0.3 to 3.5 +/- 0.3%, NS).