To investigate the role of insulin receptor substrate (IRS)-2 in vivo, we generated IRS-2-deficient mice by gene targeting. Although homozygous IRS-2-deficient mice (IRS-2-/- mice) had a body weight similar to wild-type mice, they progressively developed type 2 diabetes at 10 weeks. IRS-2-/- mice showed insulin resistance and a defect in the insulin-stimulated signaling pathway in liver but not in skeletal muscle. Despite insulin resistance, the amount of beta-cells was reduced to 83% of that in wild-type mice, which was in marked contrast to the 85% increase in the amount of beta-cells in IRS-1-deficient mice (IRS-1-/- mice) to compensate for insulin resistance. Thus, IRS-2 plays a crucial role in the regulation of beta-cell mass. On the other hand, insulin secretion by the same number of cells in response to glucose measured ex vivo was significantly increased in IRS-2-/- mice compared with wild-type mice but was decreased in IRS-1-/- mice. These results suggest that IRS-1 and IRS-2 may play different roles in the regulation of beta-cell mass and the function of individual beta-cells.