Type 2 diabetes is a polygenic disease characterized by defects in both insulin secretion and insulin action. We have previously reported that isolated insulin resistance in muscle by a tissue-specific insulin receptor knockout (MIRKO mouse) is not sufficient to alter glucose homeostasis, whereas ␤-cell-specific insulin receptor knockout (␤IRKO) mice manifest severe progressive glucose intolerance due to loss of glucosestimulated acute-phase insulin release. To explore the interaction between insulin resistance in muscle and altered insulin secretion, we created a double tissuespecific insulin receptor knockout in these tissues. Surprisingly, ␤IRKO-MIRKO mice show an improvement rather than a deterioration of glucose tolerance when compared to ␤IRKO mice. This is due to improved glucose-stimulated acute insulin release and redistribution of substrates with increased glucose uptake in adipose tissue and liver in vivo, without a significant decrease in muscle glucose uptake. Thus, insulin resistance in muscle leads to improved glucose-stimulated first-phase insulin secretion from ␤-cells and shunting of substrates to nonmuscle tissues, collectively leading to improved glucose tolerance. These data suggest that muscle, either via changes in substrate availability or by acting as an endocrine tissue, communicates with and regulates insulin sensitivity in other tissues. Diabetes 49:2126-2134, 2000 T ype 2 diabetes is the most common endocrine disorder characterized by impaired insulin-stimulated glucose uptake in skeletal muscle and adipose tissue, increased hepatic glucose production, and inadequate compensation by the pancreatic ␤-cells, ultimately leading to fasting hyperglycemia (1,2). To clarify the pathogenesis of type 2 diabetes, we and others have disrupted genes for proteins involved in the insulin-signaling cascade in mice, including the insulin receptor (IR) (3,4), insulin receptor substrate (IRS)-1 (5,6) and IRS-2 (7), and the insulin-sensitive glucose transporter GLUT4 (8). This research has provided important insights into the role of each of these proteins in insulin action.More recently, we have developed genetic models to assess the contribution of individual insulin-sensitive tissues to glucose homeostasis and to the development of type 2 diabetes using the Cre-loxP-mediated recombination strategy to inactivate the IR gene in a tissue-specific fashion. Although insulin resistance in muscle is an early defect in the pathogenesis of type 2 diabetes, muscle-specific insulin receptor knockout (MIRKO) mice show no alteration in glucose homeostasis, but rather manifest alterations in circulating triglycerides, free fatty acid (FFA) levels, and fat mass (9). In contrast, the pancreatic ␤-cell insulin receptor knockout (␤IRKO) mice exhibit a selective loss of acute insulin release in response to glucose, resulting in a progressive impairment of glucose tolerance (10). Because type 2 diabetes is characterized by a combination of insulin resistance in skeletal muscle and impaired insulin secretion from pancre...