Thirty-five freshly presenting, diabetic patients received 5 hour, 100 g oral glucose tolerance tests when first seen and after a period of carbohydrate and energy restriction. After treatment, the significant improvement in glucose tolerance was accompanied by increased insulin secretion and lower concentrations of blood ketone bodies, lactate, glycerol, FFA, triglycerides, cholesterol and pre-beta lipoprotein. There were no significant changes in serum growth hormone or blood pyruvate concentrations. Improvement in glucose tolerance was greater in patients who were obese (greater than 115% of desirable body weight for height) on presentation and was related to the improvement in insulin secretion and the diminished lipolysis. An hypothesis to explain the changes in insulin secretion is prosposed. Eleven out of the 35 patients showed sufficient improvement in glucose tolerance to require no treatment other than diet.