Although the hereditary nature of non-insulin-dependent diabetes mellitus (NIDDM) is well recognized, the nature of the predisposing defect remains elusive. Individuals with a history of gestational diabetes had shown a reduced insulin-sensitivity index (S1) in the absence of fasting hyperglycemia. To determine whether this finding could result from an inherited defect of the insulin receptor, an NIDDM pedigree was ascertained through a former gestational-diabetic proband. The proband, her siblings, and her first cousins were clinically characterized for insulin sensitivity with the minimal-model-based S1 from a modified glucose tolerance test. Islet function was characterized by the incremental insulin response to 5 g i.v. arginine at baseline and at a plasma glucose level of 500-600 mg/dl. Genetic studies included linkage analyses for the insulin gene and the insulin-receptor gene with DNA polymorphisms (restriction-fragment-length polymorphisms, RFLPs) previously described. The pattern of inheritance in this large pedigree appeared to follow autosomal-dominant transmission. No defect in islet function was found, but as a group, third-generation family members had an S1 that was significantly lower than that of weight-matched control individuals, suggesting an inherited defect in insulin action. Genetic studies showed no sharing of insulin gene, insulin-receptor-gene alleles among the diabetic individuals, or insulin-receptor alleles among third-generation individuals with insulin insensitivity. The genetic analyses thus suggest that this pedigree has an inherited defect that is not linked to the insulin gene or the insulin-receptor gene. The diminished S1 may nonetheless suggest an inherited defect in insulin action.