Hyperinsulinism, insulin resistance, and decreased number of insulin receptors are characteristic of obesity in both humans and experimental animals. To assess the role of insulin in developing obesity, diazoxide (DZ), an inhibitor of glucose-stimulated insulin secretion, was administered for 8 weeks to 7-week-old female Zucker rats in two concentrations, 50 mg/kg.day (LD-DZ), and 100 mg/kg.day (HD-DZ). The obese and lean rats were divided into three subgroups: diazoxide (DZ), pair-fed (PF), and control (C) groups (n = 6 rats/subgroup-genotype). Diazoxide-treated obese and lean animals showed significantly lower postabsorptive plasma insulin concentrations (P < 0.005) than their respective obese and lean PF and C subgroups. HD-DZ obese rats consumed more calories (P < 0.001), yet gained less weight (P < 0.05) than PF and C rats. The plasma glucose concentrations in the postabsorptive state and during glucose tolerance tests in HD-DZ obese rats were significantly lower than those in PF and C rats (P < 0.01) despite a decrease in their plasma insulin concentrations (P < 0.01), whereas HD-DZ lean rats displayed a diabetic response (P < 0.01). The adipocyte-specific insulin receptor binding was dose-dependently increased in both lean and obese DZ animals (P < 0.01). DZ had a dual effect on insulin metabolism; it decreased insulin secretion and increased insulin receptor binding. This dual effect was associated with improved glucose tolerance and a decrease in weight gain in obese rats.