OBJECTIVE Both insulin resistance and decreased insulin secretion have been shown to predict the development of NIDDM. However, methods to assess insulin sensitivity and secretion are complicated and expensive to apply in epidemiological studies. The homeostasis model assessment (HOMA) has been suggested as a method to assess insulin resistance and secretion from the fasting glucose and insulin concentrations. However, this method has not been extensively evaluated, particularly in different ethnic groups. RESEARCH DESIGN AND METHODS We applied the HOMA model to cross-sectional analyses of the San Antonio Heart Study (n = 2,465). RESULTS HOMA insulin resistance (IR) was very strongly correlated with fasting insulin (r = 0.98) and HOMA β-cell function (β-cell) was moderately correlated with the 30-min increment in insulin concentration over the 30-min increment in glucose concentration (Δ I30/Δ G30) in an oral glucose tolerance test (OGTT) (r = 0.44). NIDDM was characterized by both high HOMA IR and low HOMA β-cell function. In Mexican-Americans, HOMA IR in NIDDM subjects was 9.5 compared with 2.7 in normal glucose tolerance (NGT) subjects. In contrast, HOMA β-cell function showed only small differences in Mexican-Americans (176 NIDDM; 257 NGT). However, the ΔI30/ΔG30 (pmol/mmol) showed much larger differences (75 NIDDM; 268 NGT). When modeled separately, impaired glucose tolerance (IGT) was characterized by high HOMA IR and high HOMA β-cell function. However, when analyzed in the same regression model, high HOMA IR and low HOMA β-cell function characterized subjects with IGT. These results were similar in both ethnic groups. Mexican-Americans had increased insulin resistance (as judged by both HOMA IR and fasting insulin) and insulin secretion (by HOMA β-cell and ΔI30/ΔG30) relative to non-Hispanic whites. CONCLUSIONS We conclude that HOMA provides a useful model to assess insulin resistance and β-cell function in epidemiological studies in which only fasting samples are available and that, further, it is critical to take into account the degree of insulin resistance in assessing insulin secretion by the HOMA model.