Yellow KK mice, carrying the yellow obese gene (Ay), developed marked adiposity and diabetic symptoms in comparison with their control littermates, black KK mice. The blood glucose and circulating insulin levels were increased progressively from 5 weeks of age in yellow KK mice. Age dependent alterlations were also observed in pancreas and kidney. Namely, degranulation and glycogen infiltration of B cells, first observed at 5 weeks of age, were followed by hypertrophy and central cavitation of islets. Renal glomerular changes, which were very similar to diffuse or exudative type of sclerosis in human diabetes, were also recognized in the mice at 16 weeks of age. These changes, though less remarkable, were also noted in their control littermates older than 16 weeks of age. Some metabolic defects were developed, as demonstrated by in vitro experiments. At younger age, lipogenesis by liver and adipose tissue was increased in yellow KK mice, but there was no noticeable difference in glucose oxidation by adipose tissue between both mice. Insulin sensitivity of adipose tissue was decreased with age in both mice, especially in yellow KK mice being reduced more remarkably to its complete loss at 16 weeks of age. These findings indicate that the yellow obese gene not only induces adiposity but also accelerates development of diabetic traits of KK mice. A possible mechanism for the observed diabetogenic action of the gene will be discussed.