OBJECTIVE: A lower in vivo mitochondrial function has been reported in both type 2 diabetic patients and first-degree relatives of type 2 diabetic patients. The nature of this reduction is unknown. Here, we tested the hypothesis that a lower intrinsic mitochondrial respiratory capacity may underlie lower in vivo mitochondrial function observed in diabetic patients. RESEARCH DESIGN AND METHODS: Ten overweight diabetic patients, 12 first-degree relatives, and 16 control subjects, all men, matched for age and BMI, participated in this study. Insulin sensitivity was measured with a hyperinsulinemic-euglycemic clamp. Ex vivo intrinsic mitochondrial respiratory capacity was determined in permeabilized skinned muscle fibers using high-resolution respirometry and normalized for mitochondrial content. In vivo mitochondrial function was determined by measuring phosphocreatine recovery half-time after exercise using (31)P-magnetic resonance spectroscopy. RESULTS: Insulin-stimulated glucose disposal was lower in diabetic patients compared with control subjects (11.2 +/- 2.8 vs. 28.9 +/- 3.7 micromol x kg(-1) fat-free mass x min(-1), respectively; P = 0.003), with intermediate values for first-degree relatives (22.1 +/- 3.4 micromol x kg(-1) fat-free mass x min(-1)). In vivo mitochondrial function was 25 lower in diabetic patients (P = 0.034) and 23 lower in first-degree relatives, but the latter did not reach statistical significance (P = 0.08). Interestingly, ADP-stimulated basal respiration was 35 lower in diabetic patients (P = 0.031), and fluoro-carbonyl cyanide phenylhydrazone-driven maximal mitochondrial respiratory capacity was 31 lower in diabetic patients (P = 0.05) compared with control subjects with intermediate values for first-degree relatives. CONCLUSIONS: A reduced basal ADP-stimulated and maximal mitochondrial respiratory capacity underlies the reduction in in vivo mitochondrial function, independent of mitochondrial content. A reduced capacity at both the level of the electron transport chain and phosphorylation system underlies this impaired mitochondrial capacity.