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Insulin resistance and impaired beta-cell function are primary defects that occur early in the course of development of type 2 diabetes. Insulin resistance leads to an obligatory hyperinsulinemia in order to maintain normal glucose tolerance.
In most cases of type 2 diabetes, beta-cell dysfunction develops subsequent to the development of insulin resistance, and it is not until such beta-cell dysfunction develops that any abnormality in glucose tolerance is seen.
The condition that results is termed impaired glucose tolerance (IGT). In some cases beta-cell dysfunction may develop in the absence of early insulin resistance. However, exposure of tissues to hyperglycemia in the face of beta-cell dysfunction increases resistance to the effects of insulin whether or not insulin resistance was present to begin with.
Ultimately, type 2 diabetes is the result of worsening beta-cell function, either in the most common situation of chronic pre-existing insulin resistance or, in the less common scenario of decreased beta-cell function without pre-existing insulin resistance.

Saltiel A, Olefsky JM. Diabetes. 1996;45:1661-1669.