Type 2 diabetes is a complex disease in which genetic and environmental factors interact to produce alterations in insulin action and insulin secretion, leading to hyperglycemia. To evaluate the influence of genetic background on development of diabetes in a genetically susceptible host, we generated mice that are double heterozygous (DH) for knockout of the insulin receptor and insulin receptor substrate-1 on three genetic backgrounds (C57BL/6 [B6], 129Sv, and DBA). Although DH mice on all backgrounds showed insulin resistance, their phenotypes were dramatically different. B6 DH mice exhibited marked hyperinsulinemia and massive islet hyperplasia and developed early hyperglycemia, with 85% overtly diabetic by 6 months. By contrast, 129Sv DH mice showed mild hyperinsulinemia and minimal islet hyperplasia, and 2% developed diabetes. DBA mice had slower development of hyperglycemia, intermediate insulin levels, and evidence of islet degeneration, with 64% developing diabetes. Thus, mice carrying the same genetic defects on different backgrounds exhibited the full spectrum of abnormalities observed in humans with type 2 diabetes, which allowed for identification of potential loci that promote development of the diabetic phenotype.