Women with PCO have a unique but poorly characterized disorder of insulin action. Obese (n = 16) and nonobese (n = 14) PCO women and age- and weight-matched normal, nondiabetic ovulatory women (obese, n = 15; nonobese, n = 17) had insulin action determined in vivo with sequential multiple insulin dose euglycemic clamps and in isolated abdominal adipocytes to clarify the mechanisms of insulin resistance. PCO resulted in significant increases in the ED50 insulin for glucose utilization in vivo (P less than 0.001) and in adipocytes (P less than 0.01), without significant changes in adipocyte insulin-binding sites. PCO also resulted in significant decreases in maximal insulin-stimulated rates of glucose utilization in vivo (P less than 0.01) and in adipocytes (P less than 0.01). Obesity resulted in smaller decreases in insulin sensitivity than PCO (ED50 insulin, P less than 0.001 in vivo and P less than 0.05 in adipocytes), but greater decreases in insulin responsiveness (Vmax, P less than 0.001 in vivo and in adipocytes). The ED50 insulin for suppression of HGP was increased only in obese PCO women (P less than 0.001), and the interactions between PCO and obesity on this parameter were statistically significant. No significant correlations between androgen or estrogen levels and adipocyte insulin binding or action were found. Because insulin binding was not changed, we conclude that the major lesion causing insulin resistance in PCO is a striking decrease in insulin sensitivity secondary to a defect in the insulin receptor and/or postreceptor signal transduction. PCO also is associated with modest but significant decreases in glucose transport. These defects in insulin action appear to represent intrinsic abnormalities that are independent of obesity, metabolic derangements, body fat topography, and sex hormone levels. Conversely, changes in hepatic insulin sensitivity appear to be acquired with obesity.