Aims/hypothesis. We examined whether the Pro12-Ala polymorphism of the human peroxisome proliferator-activated receptor-γ2 (PPAR-γ2) gene was related to altered insulin sensitivity among glucose-tolerant subjects or a lower accumulated incidence or prevalence of IGT and Type II (non-insulin-dependent) diabetes mellitus among Scandinavian Caucasians. Methods. The Pro12Ala polymorphism was examined using PCR-RFLP. Whole-body insulin sensitivity measured under hyperinsulinaemic-euglycaemic conditions was estimated in a population-based sample of 616 glucose tolerant Swedish Caucasian men at age 70. In addition, insulin sensitivity index was measured using IVGTT and Bergman minimal modelling in a population-based sample of 364 young healthy Danish Caucasians. Finally, we evaluated whether the polymorphism predicted Type II diabetes and IGT in 841 seventy-year-old Swedish men. A case-control study was carried out in 654 unrelated Danish Type II diabetic patients and 742 Danish glucose tolerant subjects matched for age and sex. Results. Whole-body insulin sensitivity was significantly improved in carriers compared with non-carriers of the Ala-allele of the codon 12 polymorphism in Swedish Caucasian men (6.0 ± 2.5 vs 5.6 ± 2.5 mg · kg-1 · min-1 · [mU/l]-1 · 100, p = 0.044). The same tendency, but not significant, was observed in the insulin sensitivity index among the group of young healthy Danish Caucasians. The incidence of Type II diabetes and IGT among the Swedish subjects at the age of 70 was similar in the three genotype-groups of the Pro12Ala variant and the Ala-allele was not related to a lower prevalence of Type II diabetes in Danish Caucasians. Conclusion/interpretation. The Ala-allele of the PPAR-γ2 polymorphism is associated with improved whole body insulin sensitivity among Swedish Caucasians.