OBJECTIVE-Methods to assess beta-cell function in clinical studies are limited. The aim of the current study was to compare a direct measure of insulin secretion with fasting surrogate markers in relation to glucose tolerance status. RESEARCH DESIGN AND METHODS-In 1,380 individuals from the Insulin Resistance Atherosclerosis Study, beta-cell function was assessed using a frequently sampled intravenous glucose tolerance test (first-phase insulin secretion; acute insulin response [AIR]), homeostasis model assessment of beta-cell function (HOMA-B), proinsulin levels, and the proinsulin-to-insulin ratio. beta-Cell function was cross-sectionally analyzed by glucose tolerance categories (normal glucose tolerance [NGT], n = 712; impaired glucose tolerance [IGT], n = 353; newly diagnosed diabetes by 2-h glucose from an oral glucose tolerance test [OGTT] [DM2h], n = 80; newly diagnosed diabetes by fasting glucose [DMf], n = 135; or newly diagnosed diabetes by fasting and 2-h glucose and established diabetes on diet/exercise only [DM], n = 100). RESULTS-In Spearman correlation analyses, proinsulin and the proinsulin-to-insulin ratio were only modestly inversely related to AIR (r values from -0.02 to -0.27), and AIR was strongly related to HOMA-B (r values 0.56 and 0.58). HOMA-B markedly underestimated the magnitude of the beta-cell defect across declining glucose tolerance, especially for IGT and new DM by OGTT compared with AIR. Analyses adjusting for insulin sensitivity showed that beta-cell function was compromised in IGT, DM2h, DMf, and DM, relative to NGT, by 13, 12, 59, and 62% (HOMA-B) and by as much as 40, 60, 80, and 75%, using AIR. CONCLUSIONS-Subjects with IGT and early-stage, asymptomatic type 2 diabetic patients have more pronounced beta-cell defects than previously estimated from epidemiological studies using homeostasis model assessment.