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To better understand the relations among leptin, insulin, and body fat during the metabolic progression to diabetes and during drug monotherapy, metabolic parameters were examined in subjects classified as 1) type 2 diabetes; 2) impaired fasting glucose or mild diabetes mellitus; 3) nondiabetic, matched for body mass index (BMI); and 4) nonobese, nondiabetic. Diabetic subjects were also studied during no pharmacological treatment, after 3 months of randomization to metformin or glyburide, and after 3 months of cross-over to the opposite drug. Log leptin correlated more with percent body fat (slope, 0.042; confidence interval, 0.036–0.047; r2 = 0.826; P < 0.0001) than with total fat mass, percent truncal or nontruncal fat, or BMI. When normalized to percent fat, leptin did not differ by gender. Leptin normalized to percent fat was 35% less in untreated diabetes than that in BMI-matched controls (P < 0.001). Leptin normalized to percent fat was increased by 25% (P < 0.01) as a result of glyburide therapy compared with pretreatment values, but was unchanged by therapy with metformin. Across a spectrum of subjects with diabetes, impaired fasting glucose/mild diabetes, or BMI-matched nondiabetic controls, normalized leptin significantly correlated with glucose-induced insulin release, but not with insulin sensitivity. Our data suggest that plasma leptin is reduced in untreated type 2 diabetes probably as a consequence of reduced insulin secretion and that circulating leptin concentrations are differentially affected by monodrug therapy.