The mechanism of action of sulphonylureas is not completely understood. In the present study we evaluated the effects of gliquidone, a second-generation compound, on several metabolic parameters in 22 patients with untreated newly-diagnosed type II (noninsulin-dependent) diabetes mellitus. After either 1 or 6 months of treatment with gliquidone plus isocaloric diet we observed: 1) a significant decrease in fasting plasma glucose and glycemic profile after oral glucose load; 2) unchanged fasting and postglucose plasma insulin levels; 3) no change in fasting C-peptide levels but a significant increase in C-peptide concentrations after glucose challenge; 4) a significant increase in glucose disappearance rate from plasma following iv insulin injection; 5) an increase in the insulin-induced reduction of plasma levels of free-fatty acids; 6) no change in plasma C-peptide levels following iv insulin injection; 7) a significant increase in specific insulin binding to monocytes. After 6 but not 1 month of gliquidone therapy we also found an increase in the activity of hexokinase in circulating mononuclear leukocytes. These results suggest that the hypoglycemic effect of gliquidone occurs through either an increased beta cell response to glucose stimulus or an enhanced insulin sensitivity. The latter effect seems to depend on both receptor and postreceptor mechanisms.