Type 2 diabetes mellitus is a widespread disease, affecting millions of people globally. Although genetics and environmental factors seem to have a role, the cause of this metabolic disorder is largely unknown. Here we report a genetic flaw that markedly reduced the intracellular expression of the high mobility group A1 (HMGA1) protein, and adversely affected insulin receptor expression in cells and tissues from four subjects with insulin resistance and type 2 diabetes. Restoration of HMGA1 protein expression in subjects' cells enhanced INSR gene transcription, and restored cell-surface insulin receptor protein expression and insulin-binding capacity. Loss of Hmga1 expression, induced in mice by disrupting the Hmga1 gene, considerably decreased insulin receptor expression in the major targets of insulin action, largely impaired insulin signaling and severely reduced insulin secretion, causing a phenotype characteristic of human type 2 diabetes.