To clarify whether β-cell function deteriorates with increasing albuminuria and duration of diabetes, we investigated the insulin and c-peptide response to oral glucose tolerance test in 47 healthy subjects and 75 normoalbuminuric (group 1), 30 microalbuminuric (group 2), and 35 macroalbuminuric (group 3) Type 2 diabetes mellitus patients. The total area under the insulin curve (AUCI) values of groups 1, 2, and 3 were 245 ± 16, 193 ± 17, and 88 ± 8 pmol/L · h, respectively, significantly lower than that (624 ± 34 pmol/L · h) of the healthy group. The mean total area under the c-peptide curve (AUCC-P) values of groups 1, 2, and 3, respectively, were 2.50 ± 0.11, 2.05 ± 0.15, and 1.73 ± 0.07 nmol/L · h, respectively, significantly lower than that (5.47 ± 0.19 nmol/L · h) of the healthy controls. The mean AUCI and AUCC-P values of group 3 were significantly reduced compared to those of group 1. The mean AUCI and AUCC-P values of patients with 0–5, 5–10, 10–15, and >15 years' duration were significantly decreased compared to those of healthy subjects. The mean AUCI and AUCC-P values of patients with >15 years' duration were significantly lower than those of patients with 0–5 years' duration. The mean hemoglobin Ale values of the three diabetic groups were not significantly different. These data suggest that β-cell function deterioration was associated with increasing albuminuria and diabetic duration in Type 2 diabetic patients.