The ability of insulin to bind, internalize, and regulate its own receptor was investigated in cultured human fibroblasts obtained from 8 normal subjects and 8 patients with type II, non-insulin-dependent diabetes mellitus (NIODM). The ability of the cells from the two groups to bind insulin was the same, and Scatchard analysis demonstrated identical curvilinear plots. When cells were incubated at 37°C with the lysosomotropic agent, chloroquine, and 125I-insulin, the drug led to a marked, but comparable, increase in cell-associated radioactivity in both control and diabetic fibroblasts (236 and 245% increase, respectively). Insulin pretreatment leads to a loss of insulin receptors in cultured human fibroblasts and preincubation with insulin led to a comparable dose-dependent decrease in subsequent insulin binding in both normal and diabetic fibroblasts. Scatchard analysis demonstrated that this decrease in binding was entirely due to a decrease in receptor number with no change in receptor affinity. These data demonstrate normal insulin binding, insulin internalizatidh, and insulin-mediated receptor loss in fibroblasts from patients with NIDDM, and these cells are several generations removed from the in vivo milieu. Thus, these results provide direct evidence that the well-known decrease in insulin binding in freshly isolated cells from patients with NIDDM is a reflection of environmental factors rather than an intrinsic (genetic) cellular abnormality.