To evaluate the effect of weight loss on substrate oxidation, energy expenditure, and insulin sensitivity we studied 12 obese subjects (body mass index 33.4 +/- 1.1) before and after 6 wk of a very-low-calorie diet (VLCD) with euglycemic insulin clamp in combination with indirect calorimetry. Body weight decreased from 105.3 +/- 4.6 to 94.1 +/- 4.0 kg (P less than 0.001) and fat mass from 47.2 +/- 3.6 to 37.7 +/- 3.0 kg (P less than 0.001). Total glucose disposal during insulin clamp increased from 30.4 +/- 4.3 to 38.4 +/- 4.4 mumol.kg lean body mass (LBM)-1.min-1 (P less than 0.05), insulin-stimulated glucose oxidation from 14.3 +/- 4.6 to 19.1 +/- 1.4 mumol.kg LBM-1.min-1 (P less than 0.05), and non-oxidative glucose metabolism from 16.0 +/- 3.8 to 19.3 +/- 3.6 mumol.kg LBM-1.min-1 (NS). Lipid oxidation decreased in the basal state (P less than 0.05) and during the insulin clamp (P less than 0.01). The basal rate of energy expenditure decreased from 99.1 +/- 4.6 to 88.5 +/- 2.7 kJ.kg LBM-1.min-1 (P less than 0.05) after weight reduction. A reduction in fat mass achieved by VLCD is associated with reduced lipid oxidation and, because of substrate competition, enhanced glucose oxidation. The physiological consequence is improved insulin sensitivity.