Aims/hypothesis. Cross-sectional studies indicate that enlarged subcutaneous abdominal adipocyte size is associated with hyperinsulinaemia, insulin resistance and glucose intolerance. To further explore the pathophysiological significance of these associations, we examined prospectively whether enlarged subcutaneous abdominal adipocyte size predicts Type II (non-insulin-dependent) diabetes mellitus. Methods. Body composition (hydrodensitometry), mean subcutaneous abdominal adipocyte size (fat biopsy), insulin sensitivity (hyperinsulinaemic clamp) and the acute insulin secretory response (25-g i. v. GTT) were assessed in 280 Pima Indians with either normal (NGT), impaired (IGT) or diabetic glucose tolerance (75-g OGTT). Subjects with NGT were then followed prospectively. Results. After adjusting for age, sex and per cent body fat, mean subcutaneous abdominal adipocyte size was 19 % and 11 % higher in subjects with diabetes and IGT, compared with those with NGT (p < 0.001). Insulin sensitivity was inversely correlated with mean subcutaneous abdominal adipocyte size (r = –0.53, p < 0.0001), even after adjusting for per cent body fat (r = –0.31, p < 0.001). In 108 NGT subjects followed over 9.3 ± 4.1 years (33 of whom developed diabetes), enlarged mean subcutaneous abdominal adipocyte size but not high per cent body fat, was an independent predictor of diabetes, in addition to a low insulin sensitivity and acute insulin secretory response [relative hazard 10^th vs 90^th centile (95 % CI): 5.8 (1.7–19.6), p < 0.005]. In 28 NGT subjects with a 9 % weight gain over 2.7 ± 1.3 years, changes in insulin sensitivity were inversely and independently related to changes in mean subcutaneous abdominal adipocyte size and per cent body fat. Conclusion/interpretation. Although enlarged mean subcutaneous abdominal adipocyte size is associated with insulin resistance cross-sectionally, prospectively, both abnormalities are independent and additive predictors of Type II diabetes. [Diabetologia (2000) 43: 1498–1506]