Of 171 patients having necrobiosis lipoidica diabeticorum (NLD), III had diabetes mellitus and 60 did not. Diabetic and nondiabetic patients had similar genetic backgrounds for diabetes mellitus, similar appearing lesions of NLD, and similar courses with respect to NLD. Of 19 initially nondiabetic patients, 42% had current or prospective diabetes mellitus on the basis of the results of standard and cortisone glucose tolerance tests. Many of those having normal responses to the tests gave family histories of diabetes mellitus. Patients having NLD usually develop diabetes mellitus at a younger age than usual. Both diseases may occur at any age however. NLD classically occurs as sclerodermiform plaques in the legs, but atypical lesions and locations occur. Palisading granuloma often characterized NLD lesions of diabetic patients and a histiocytic-epithelioid cell response, those of nondiabetic patients.