MTNR1B is a type 2 diabetes susceptibility locus associated with cross-sectional measures of insulin secretion. We hypothesised that variation in MTNR1B contributes to the absolute level of a diabetes-related trait, temporal rate of change in that trait, or both. We tested rs10830963 for association with cross-sectional diabetes-related traits in up to 1,383 individuals or with rate of change in the same phenotypes over a 3-5 year follow-up in up to 374 individuals from the family-based BetaGene study of Mexican Americans. rs10830963 was associated cross-sectionally with fasting glucose (p = 0.0069), acute insulin response (AIR; p = 0.0013), disposition index (p = 0.00078), glucose effectiveness (p = 0.018) and gestational diabetes mellitus (OR 1.48; p = 0.012), but not with OGTT 30 min Δinsulin (the difference between the 30 min and fasting plasma insulin concentration) or 30 min insulin-based disposition index. rs10830963 was also associated with rate of change in fasting glucose (p = 0.043), OGTT 30 min Δinsulin (p = 0.01) and AIR (p = 0.037). There was no evidence for an association with the rate of change in beta cell compensation for insulin resistance. We conclude that variation in MTNR1B contributes to the absolute level of insulin secretion but not to differences in the temporal rate of change in insulin secretion. The observed association with the rate of change in insulin secretion reflects the natural physiological response to changes in underlying insulin sensitivity and is not a direct effect of the variant.