Controversy exists about the optimal amount and source of dietary carbohydrate for managing insulin resistance. Therefore, we compared the effects on insulin sensitivity (S-I), pancreatic responsivity (AIR(glu)) and glucose disposition index (DI=S(I)xAIR(glu)) of dietary advice aimed at reducing the amount or altering the source of dietary carbohydrate in subjects with impaired glucose tolerance (IGT). Subjects were randomized to high-carbohydrate-high-glycaemic index (GI) (high-GI, n 11), high-carbohydrate-low-GI (low-GI, n 13), or low-carbohydrate-high-monounsaturated fat (MUFA, n 11) dietary advice, with S-I, AIR(glu) and DI measured using a frequently sampled, intravenous glucose tolerance test before and after 4 months treatment. Carbohydrate and fat intakes and diet GI, respectively, were: high-GI, 53 %, 28 %, 83; low-GI, 55 %, 25 %, 76; MUFA, 47 %, 35 %, 82. Weight changes on each diet differed significantly from each other: high-GI, -0.49 (sem 0.29) kg; low-GI, -0.19 (sem 0.40) kg; MUFA +0.27 (sem 0.45) kg. Blood lipids did not change, but glycated haemoglobin increased significantly on MUFA, 0.02 (sem 0.11) %, relative to low-GI, -0.19 (sem 0.08) %, and high-GI, -0.13 (sem 0.14) %. Diastolic blood pressure fell by 8 mmHg on low-GI relative to MUFA (P=0.038). Although S-I and AIR(glu) did not change significantly, DI, a measure of the ability of beta-cells to overcome insulin resistance by increasing insulin secretion, increased on low-GI by >50 % (P=0.02). After adjusting for baseline values, the increase in DI on low-GI, 0.17 (sem 0.07), was significantly greater than those on MUFA, -0.09 (sem 0.08) and high-GI, -0.03 (sem 0.02) (P=0.019). Thus, the long-term effects of altering the source of dietary carbohydrate differ from those of altering the amount. High-carbohydrate-low-GI dietary advice improved beta-cell function in subjects with IGT, and may, therefore, be useful in the management of IGT.