Type II diabetic subjects are both insulin-deficient and insulin-resistant. Recent studies suggest that the insulin resistance is due to a combined receptor and postreceptor defect with the postreceptor defect being the predominant lesion. In the present study, we examined the effects of exogenous insulin therapy upon these defects in insulin action in six untreated type II diabetic subjects. Glycemic control and adipocyte insulin binding were measured and in vivo insulin dose-response curves for overall glucose disposal and suppression of hepatic glucose output were constructed before treatment. Following these initial studies, the diabetic subjects were treated with twice-daily injections of regular and NPH purified pork insulin for 14 days and the pretreatment studies repeated. Glycemic control was significantly improved by this treatment regimen. The mean fasting serum glucose level (±SE) fell from 287 ± 20 to 125 ± 13 mg/dl, the mean glycosylated hemoglobin level (± SE) decreased from 14.2 ± 1.1% to 8.3 ± 0.5%, and the mean 24-h urinary glucose excretion (±SE) declined from 65.6 ± 40.3 to 0.6 ± 0. 1 g/24 h. Adipocyte insulin binding did not change significantly during the treatment period. In contrast, the 14-day period of insulin treatment produced a 72% increase (P < 0.005) in the maximal rate of insulin-stimulated glucose disposal, 321 ± 32 mg/M²/min compared with 187 ± 32 mg/M²/min before treatment, indicating that the postreceptor defect in insulin action was significantly ameliorated by insulin treatment. The dose-response curve for insulin-mediated suppression of hepatic glucose output was rightshifted, consistent with the decrease in insulin binding, with no decrease in the maximal effect before treatment and not significantly changed following insulin treatment. In conclusion, the postreceptor defect in insulin-stimulated glucose disposal is largely ameliorated by exogenous insulin treatment, suggesting that this defect in insulin action is an acquired abnormality which is secondary to some aspect of the insulin-deficient state.