Lifestyle interventions reduce the incidence of type 2 diabetes among individuals with impaired glucose tolerance (IGT). However, it is unknown whether this is due to improved insulin sensitivity or insulin secretion. We investigated at baseline insulin sensitivity and insulin secretion applying frequently sampled intravenous glucose tolerance test (FSIGT) in 87 of 101 obese middle-aged subjects with IGT randomized into an intervention or a control group in the Finnish Diabetes Prevention Study. FSIGT was repeated after 4 years in 52 people. There were no significant differences in any of the baseline anthropometric or metabolic characteristics between the groups. The 4-year weight and waist circumference decreases were greater in the intervention than in the control group (P = 0.043 and P = 0.025, respectively). At 4-year examination, insulin sensitivity (Si) tended to be higher in the intervention group (the difference between the mean values 36%; P = 0.067, and P = 0.136 after adjustment for age, sex, BMI, and baseline Si value). There was strong correlation between the 4-year changes in Si and weight (r = -0.628 and r = -0.710, for intervention and control groups; P < 0.001 for both). In the entire group, Si improved by 64% in the highest tertile of weight loss but deteriorated by 24% in those who gained weight (lowest tertile). Acute insulin response declined significantly in the control group. In conclusion, Si markedly improved by weight reduction during the 4-year follow-up of individuals with IGT. Insulin secretion remained constant for years in individuals with IGT who were able to lose weight.