This study was initiated to develop an animal model of type 2 diabetes in a non-obese, outbred rat strain that replicates the natural history and metabolic characteristics of the human syndrome and is suitable for pharmaceutical research. Male Sprague-Dawley rats (n = 31), 7 weeks old, were fed normal chow (12% of calories as fat), or high-fat diet (40% of calories as fat) for 2 weeks and then injected with streptozotocin (STZ, 50 mg/kg intravenously). Before STZ injection, fat-fed rats had similar glucose concentrations to chow-fed rats, but significantly higher insulin, free fatty acid (FFA), and triglyceride (TG) concentrations (P < .01 to .0001). Plasma insulin concentrations in response to oral glucose (2 g/kg) were increased 2-fold by fat feeding (P < .01), and adipocyte glucose clearance under maximal insulin stimulation was significantly reduced (P < .001), suggesting that fat feeding induced insulin resistance. STZ injection increased glucose (P < .05), insulin (P < .05), FFA (P < .05), and TG (P < .0001) concentrations in fat-fed rats (Fat-fed/STZ rats) compared with chow-fed, STZ-injected rats (Chow-fed/STZ rats). Fat-fed/STZ rats were not insulin deficient compared with normal chow-fed rats, but had hyperglycemia and a somewhat higher insulin response to an oral glucose challenge (both P < .05). In addition, insulin-stimulated adipocyte glucose clearance was reduced in Fat-fed/STZ rats compared with both chow-fed and Chow-fed/STZ rats (P < .001). Finally, Fat-fed/STZ rats were sensitive to the glucose lowering effects of metformin and troglitazone. In conclusion, Fat-fed/STZ rats provide a novel animal model for type 2 diabetes, simulates the human syndrome, and is suitable for the testing of antidiabetic compounds.