OBJECTIVE - Impaired fasting glucose (IFG) and impaired glucose tolerance (IGT) are considered pre-diabetes states. There are data in pediatrics in regard to their pathophysiology. We investigated differences in insulin sensitivity and secretion among youth with IFG. IGT, and coexistent IFG/IGT compared with those with normal glucose tolerance (NGT) and type 2 diabetes. RESEARCH DESIGN AND METHODS - A total of 24 obese adolescents with NOT, 13 with IFG, 29 with IGT, 11 with combined IFG/IGT, and 30 with type 2 diabetes underwent evaluation of hepatic glucose production ([6,6-H-2(2)]glucose), insulin-stimulated glucose disposal (R-d, euglycemic clamp), first- and second-phase insulin secretion (hyperglycemic clamp), body composition (dual-energy X-ray absorptiometry), abdominal adiposity (computed tomography), and substrate oxidation (indirect calorimetry). RIESULTS - Adolescents with NGT, pre-diabetes, and type 2 diabetes had similar body composition and abdominal fat distribution, R-d was lower (P=0.009) in adolescents with type 2 diabetes than in those with NGT. Compared with adolescents with NOT, first-phase insulin was lower in those with IFG, IGT, and IFG/IGT with further deterioration in those with type 2 diabetes (P<0.001), and beta-cell function relative to insulin sensitivity (glucose disposition index [GDI]) was also lower in those with IFG, IGT, and IFG/IGT (40, 47, and 47%, respectively), with a further decrease (80%) in those with type 2 diabetes (P<0.001). GDI was the major determinant of fasting and 2-h glucose levels. CONCLUSIONS - Obese adolescents was show signs of glucose dysregulation, including abnormal fasting glucose, glucose intolerance or both, are more likely to have impaired insulin secretion rather than reduced insulin sensitivity. Given the impairment in insulin secretion, they arc at high risk for progression to type 2 diabetes. Further deterioration in insulin sensitivity or secretion may enhance the risk for this progression.