The effects of insulin-like growth factor I (IGF-I) and insulin on free fatty acid (FFA) and glucose metabolism were compared in eight control and eight type 2 diabetic subjects, who received a two-step euglycemic hyperinsulinemic (0.25 and 0.5 mU · kg¹ · min¹) clamp and a two-step euglycemic IGF-I (26 and 52 pmol · kg¹ · min¹) clamp with [3-³H]glucose, [1-¹⁴C]palmitate, and indirect calorimetry. The insulin and IGF-I infusion rates were chosen to augment glucose disposal (R_d) to a similar extent in control subjects. In type 2 diabetic subjects, stimulation of R_d (second clamp step) in response to both insulin and IGF-I was reduced by ~40-50% compared with control subjects. In control subjects, insulin was more effective than IGF-I in suppressing endogenous glucose production (EGP) during both clamp steps. In type 2 diabetic subjects, insulin-mediated suppression of EGP was impaired, whereas EGP suppression by IGF-I was similar to that of controls. In both control and diabetic subjects, IGF-I-mediated suppression of plasma FFA concentration and inhibition of FFA turnover were markedly impaired compared with insulin (P < 0.01-0.001). During the second IGF-I clamp step, suppression of plasma FFA concentration and FFA turnover was impaired in diabetic vs. control subjects (P < 0.05-0.01). Conclusions: 1) IGF-I is less effective than insulin in suppressing EGP and FFA turnover; 2) insulin-resistant type 2 diabetic subjects also exhibit IGF-I resistance in skeletal muscle. However, suppression of EGP by IGF-I is not impaired in diabetic individuals, indicating normal hepatic sensitivity to IGF-I.