Hyperinsulinaemia and abnormalities in hepatic insulin extraction commonly coexist in ethnic groups with severe insulin resistance. Therefore, we compared the effects of ethnicity on glucose/insulin/C-peptide dynamics, hepatic insulin extraction, and insulin sensitivity in healthy black (n = 32) and white (n = 30) Americans. Standard oral glucose tolerance test (OGTT) and tolbutamide-modified, frequently sampled, intravenous glucose tolerance (FSIVGT) tests were performed in each subject. Insulin sensitivity index (S1) was calculated using the MINIMOD method described by Bergman et al. Basal and post-stimulation hepatic insulin extraction were calculated by the molar ratios of C-peptide and insulin concentrations during the basal steady state and areas under the post-stimulation hormone curves, respectively. Apart from a slightly greater mean serum glucose peak response after oral glucose in the whites, mean glucose levels were identical in the blacks and whites during both stimulations. In contrast, serum insulin levels at basal and during both stimulations were significantly greater (2–3 fold) in the blacks than whites. However, the corresponding C-peptide responses were identical in both groups. The basal and postprandial hepatic insulin extraction were 33% and 45% lower in the blacks when compared to whites, respectively. The mean S1 was significantly (p < 0.02) lower in the blacks (4.93 ± 0.46) than the whites (7.17 ± 0.88 × 10−4 (mU l−1)−1). We conclude that ethnicity may be a major determinant of the mechanism of peripheral hyperinsulinaemia and insulin insensitivity in black and white Americans.