OBJECTIVE - The aim of this study was to describe the natural history of insulin secretion and insulin sensitivity in the development of isolated impaired fasting glycemia (i-IFG), isolated impaired glucose tolerance (i-IGT), and combined IFG/IGT. RESEARCH DESIGN AND METHODS - Baseline and 5-year follow-up data from the Inter99 study were used. Individuals with normal glucose tolerance (NGT) at baseline and i-IFG, i-IGT, combined IFG/IGT, or NGT at the 5-year follow-up were examined with an oral glucose tolerance test (n = 3,145). Insulin sensitivity index (ISI), homeostasis model assessment of insulin sensitivity (HOMA-IS), early-phase insulin release (EPIR), and insulin secretion relative to insulin action (disposition index) were estimated. RESULTS - Five years before the pre-diabetes diagnoses (i-IFG, i-IGT, and IFG/IGT), ISI, HOMA-IS, EPIR, and disposition index were lower than in individuals who maintained NGT. During the 5-year follow-up, individuals developing i-IFG experienced a significant decline only in HOMA-IS, whereas individuals developing i-IGT experienced significant declines in ISI, EPIR, and disposition index. Individuals with IFG/IGT exhibited pronounced declines in ISI, HOMA-IS, EPIR, and disposition index during the 5-year follow-up. CONCLUSIONS - A stationary reduced insulin secretion followed by a decline in primarily hepatic insulin sensitivity characterizes the transition from NGT to i-IFG. In contrast, low whole-body insulin sensitivity with a secondary lack of β-cell compensation is associated with the development of i-IGT. Thereby, i-IFG and i-IGT appear to result from different underlying mechanisms, which may have implications for the prevention and treatment of the diabetes that succeeds them.