AIMS/HYPOTHESIS: We have previously demonstrated that type 2 diabetes resolves after bariatric surgery. To study the role of NEFA in the prompt normalisation of beta cell glucose sensitivity, insulin secretion and beta cell glucose and lipid metabolism were investigated by a model of nutrient-stimulated insulin secretion using a multiple-meal test. METHODS: Hourly glucose, C-peptide and NEFA were measured in nine morbidly obese, type 2 diabetic patients before and 1 week after bariatric surgery and in six matched healthy volunteers over 24 h. A mathematical model of glucose-NEFA comodulation of insulin secretion rate (ISR) was used to compute ISR and beta-oxidation. Insulin sensitivity was measured by an OGTT minimal model. RESULTS: Beta cell sensitivity to glucose and NEFA was doubled after surgery, while the 24 h insulin secretion decreased from 277.1 +/- 144.4 to 198.0 +/- 107.6 nmol/m(2) (p < 0.02). Insulin sensitivity was restored. The beta-oxidation rate of beta cells was completely normalised (from 0.032 +/- 0.012 x 10(-12) to 0.103 +/- 0.031 x 10(-12) mmol/min per cell, p < 0.005). The best predictor of beta cell function improvement was the duration of diabetes. CONCLUSIONS/INTERPRETATION: Bariatric surgery in type 2 diabetes restores beta-oxidation in beta cells, doubles glucose-NEFA sensitivity and reverses diabetes. It is likely that ISR is reduced to match insulin-sensitivity normalisation, in spite of no significant reduction in NEFA levels. We hypothesise that insulin sensitivity normalisation might appear as a consequence of nutrient exclusion from proximal intestinal transit, and that secondarily the need for insulin secretion diminishes. The insulin sensitivity increase is much higher than usually obtained by insulin-sensitising agents and is independent of weight changes.