Aims/hypothesis: The aim of this prospective study was to investigate predictors of deteriorating glucose tolerance in subjects of British extraction. Methods: A total of 156 non-diabetic subjects (86 with a family history of type 2 diabetes) underwent a 75-g OGTT and anthropometric assessment at baseline and 5 years later. Pancreatic beta cell function and whole-body insulin sensitivity were studied by model assessment. Subjects were classified as progressors if glucose tolerance moved one or more steps from normal, impaired fasting glucose, impaired glucose tolerance and diabetes over the follow-up period. Results: At baseline, the progressors (n=22) had increased adiposity and a higher proportion of familial diabetes and abnormal glucose tolerance than non-progressors. Baseline pancreatic beta cell sensitivity to changes in glucose (p<0.02) and whole-body insulin sensitivity (p<0.0001) were decreased in the progressors. Logistic regression revealed that baseline and follow-up changes in beta cell glucose sensitivity and insulin sensitivity, rather than the classical clinical predictors (adiposity, familial diabetes and glucose levels), were the key independent predictors of progression (explaining over 50% of the progression). Conclusions/ interpretation: Impaired pancreatic beta cell glucose sensing and whole-body insulin sensitivity predict progression to hyperglycaemia. Strikingly, these pathophysiological changes override the importance of the clinical risk factors and highlight potential metabolic targets for prevention strategies.