To study the etiopathogenesis of secondary drug failure to treatment with oral antidiabetic agents in patients with non-insulin-dependent diabetes (NIDD) we compared 60 “nonresponders” with 60 “responders” to treatment with oral drugs. Secondary drug failure was defined as mean diurnal blood glucose >12 mmol/L after an initial good response of ≥2 yr. The nonresponders were characterized by 50% lower C-peptide concentrations than the responders (P < 0.001). We could not, however, define a critical C-peptide level to discriminate between patients requiring and not requiring insulin therapy. There was a wide overlap of individual C-peptide values between responders and nonresponders that attenuates the clinical value of single C-peptide measurements in predicting therapy. Only by serial measurements over a period of time was it possible to achieve information about changes in beta cell function. The nonresponders showed increased frequency of islet cell (P < 0.01), thyroid antimicrosomal (P < 0.01), and gastric parietal cell antibodies (P < 0.02). In nonresponders, HLA-antigen B8 was increased (P < 0.05) and HLA-B7 decreased (P < 0.01) compared with frequencies of responders. In conclusion, impaired beta cell function is a characteristic feature of many, but not all, NIDD patients who fail on treatment with oral antidiabetic drugs. The presence of islet cell and thyrogastric antibodies can unmask a distinct group of NIDD patients with a high risk of secondary drug failure and subsequent insulin dependency. HLA typing may further help to predict secondary failure in NIDD.