We have investigated the biochemical basis of beta-cell compensation and failure using rodent models of obesity with or without diabetes. We also wished to study glucolipotoxicity in vivo and determine whether a progressive fall in beta-cell mass and/or beta-cell dysfunction contribute to beta-cell failure in two relatively mild type 2 diabetes (T2D) rodent models. Islets from the obese, hyperlipidemic and normoglycemic Zucker fatty (ZF) rat showed enhanced fatty acid oxidation, lipolysis and fatty acid esterification into complex lipids but no steatosis despite marked hyperlipidemia. We will present the novel concept that the observed enhanced triglyceride/free fatty acid (TG/FFA) cycling in these islets acts as a metabolic signalling machinery that may play a role in beta-cell compensation promoting simultaneously cell growth, enhanced insulin release and allowing glucolipodetoxification. The first T2D model that was studied is the 60% pancreatectomized ZF rat (ZF-Px; performed under isoflurane anaesthesia). At 3 weeks post surgery, beta-cell mass and proliferation, proinsulin biosynthesis, pancreatic insulin content, insulin secretion and islet glucose and lipid metabolism were measured. Lean ZL-Px rats maintained normal glycaemia and glucose-stimulated insulin secretion (GSIS) despite incomplete recovery of beta-cell mass possibly due to compensatory enhanced islet glucose metabolism and lipolysis. ZF-Px rats developed moderate hyperglycaemia (14 mM), hypertriglyceridaemia and relative hypoinsulinaemia. Despite beta-cell mass recovery and normal arginine-induced insulin secretion, GSIS and pancreatic insulin content were profoundly lowered in ZF-Px rats. Proinsulin biosynthesis was not reduced. Compensatory increases in islet glucose metabolism in ZF-Px above that of ZF-Sham rats were not seen. TG content was not increased in ZF-Px islets, possibly due to lipodetoxification by enhanced lipolysis and fatty acid oxidation. Fatty acid accumulation into monoacylglycerol and diacylglycerol, but not TG, was increased in ZF-Px islets. We conclude for this model that falling beta-cell mass, reduced proinsulin biosynthesis and islet steatosis are not implicated in early beta-cell failure and glucolipotoxicity in ZF-Px rats. Rather, severe beta-cell dysfunction with a specific reduction in GSIS and marked depletion of beta-cell insulin stores with altered lipid partitioning underlie beta-cell failure in this T2D model. The second T2D model that was studied is C57Bl/6 mice developing obesity and mild diabetes when fed with a high fat diet (HFD) (diet-induced obesity, DIO). Although DIO is perhaps the most widely studied model of obesity associated T2D, little is known about the mechanisms responsible for its beta-cell failure. After 8 weeks of HFD, DIO mice had a glycemia of about 11 mM. First phase glucose-stimulated insulin secretion (GSIS) in vivo was defective in DIO mice and isolated islets did not respond to glucose. The defect of insulin release was not due to a reduction in glucose metabolism, since islet glucose utilization and oxidation were similar as in control mice. Islet fat oxidation was enhanced and TG/FA cycling was not enhanced in DIO mice. The islet TG content was similar in both groups, and beta-cell mass was increased in DIO mice. We conclude for this second model that altered beta-cell function and glucolipotoxicity in DIO mice is unrelated to a reduction in beta-cell mass, islet steatosis or changes in beta-cell glucose metabolism. Similarly to ZF-Px rats it is possibly related to enhanced fat oxidation, that is anticipated to remove lipid signaling molecules for insulin secretion, and a lack of enhancement in TG/FA cycling, the later occurring in compensating ZF islets.