Abstract The purpose of this study was to determine if immune mechanisms in GAD positive patients’ contribute to the pathogenesis of a specific sub-type of Type 2 diabetes. GAD positive ( n = 8) and ...GAD negative ( n = 8) subjects diagnosed with Type 2 diabetes were matched for age, gender, body mass index, duration of diabetes and glycaemic control. All subjects underwent an insulin-modified frequently sampled intravenous glucose tolerance test to measure insulin sensitivity and insulin secretory function with minimal model analysis. In addition, BRIN-BD11 clonal β-cells were supplemented with patients’ sera to determine basal and alanine-stimulated insulin secretion and terminal complement complex (TCC) formation. Both groups were severely insulin resistant (0.56 ± 0.17 vs. 0.99 ± 0.33 10−4 min−1 /(μU ml−1 ) for GADneg and GADpos, respectively) but the GAD negative subjects had a higher basal (87 ± 11 vs. 58 ± 14 pmol l−1 , p < 0.05) and glucose-stimulated insulin secretion (ΔAUCins 0.96 ± 0.12 vs. 0.60 ± 0.12 pmol/(l−1 min), p < 0.05). In vivo measures of insulin secretion were negatively correlated with TCC formation, independent of antibody status. In conclusion, GAD positive subjects initially diagnosed with Type 2 diabetes are unable to compensate for insulin resistance due to more pronounced β-cell impairment. TCC formation may be partly responsible for the insulin secretory dysfunction associated with this specific sub-type of Type 2 diabetes.