OBJECTIVE - The study objective was to assess the relationship between β-cell function and HbA1c. RESEARCH DESIGN AND METHODS - A total of 522 Mexican American subjects participated in this study. Each subject received a 75-g oral glucose tolerance test (OGTT) after a 10- to 12-h overnight fast. Insulin sensitivity was assessed with the Matsuda index. Insulin secretory rate was quantitated from deconvolution of the plasma C-peptide concentration. β-Cell function was assessed with the insulin secretion/insulin resistance (IS/IR) (disposition) index and was related to the level of HbA1c. RESULTS - At HbA1c levels <5.5%, both the Matsuda index of insulin sensitivity and IS/IR index were constant. However, as the HbA1c increased >5.5%, there was a precipitous decrease in both the Matsuda index and the IS/IR index. Subjects with HbA1c = 6.0-6.4% had a 44 and 74% decrease in the Matsuda index and the IS/IR index, respectively, compared with subjects with HbA1c <5.5% (P < 0.01 for both indices). Subjects with normal glucose tolerance and HbA1c <5.7% had β-cell function comparable to that of subjects with normal glucose tolerance with HbA1c = 5.7-6.4%. However, subjects with impaired fasting glucose or impaired glucose tolerance had a marked decrease in β-cell function independent of their HbA1c level. CONCLUSIONS - The results of the current study demonstrate that in Mexican Americans, as HbA1c increases >6.0%, both insulin sensitivity and β-cell function decrease markedly. Performing an OGTT is pivotal for accurate identification of subjects with impaired β-cell function.