Objective: We have previously shown that short-term energy restriction followed by modest lifestyle changes improves glucose tolerance for up to 1 year in obese individuals. The purpose of the present study was to determine the mechanism by which improvements in glucose tolerance occur in obese African Americans with insulin resistance and abnormal glucose tolerance. Research Design and Methods: Nine subjects (53 ± 2 years; body mass index, 37 ± 3 kg/m2 [mean ± SEM]) received a low-energy diet (3883 ± 222 kJ/d) for 1 week, and then followed a modest lifestyle intervention program for up to 1 year. Body composition was estimated by hydrostatic weighing, and insulin secretion and action were assessed during a hyperglycemic clamp with superimposed arginine infusion and fat meal. Baseline and final tests were performed during weight stability. Results: Significant improvements (P <. 05) were observed for body weight (-6.1 ± 1.1 kg), body composition (-5.5 ± 1.3 kg fat mass), fasting plasma glucose (-1.1 ± 0.3 mmol/L), fasting insulin (-52 ± 21 pmol/L), oral glucose tolerance, and insulin action (+24%), defined as an increase in glucose disposal rate relative to plasma insulin concentration during the hyperglycemic clamp. These improvements were independent of an acute effect of energy restriction or weight loss, because body weight was stable. Conclusions: These results suggest that the improvements in glucose tolerance with a modest lifestyle intervention were attributable to an improvement in insulin action, and provide evidence that despite persistent obesity (body mass index, 34.7 ± 2.4 kg/m 2), long-term benefits can be achieved with relatively small weight loss in obese African Americans.