Research using mice bearing targeted gene mutations that affect insulin action and β-cell function has contributed important new information to our understanding of the pathogenesis of type 2 diabetes. The phenotypes of these mutant mice have shed new light on mechanisms and sites of insulin resistance in vivo. Moreover, they have enabled investigators to analyze the genetic interactions underlying the complex inheritance of type 2 diabetes. These studies suggest that the insulin receptor preferentially acts through different IRS molecules in different tissues, and that an impairment of insulin action in canonical and noncanonical target tissues is required for the onset of diabetes.