Background and aims: We investigated the separate effects of insulin resistance and beta cell function at the diagnosis of type 2 diabetes on the development of mortality and diabetes complications. Materials and methods: This cohort study included 864 individuals with type 2 diabetes (median age 60 years) in whom fasting glucose and fasting C-peptide were measured at diabetes diagnosis. Insulin resistance was estimated by HOMA-%S and beta cell function by HOMA-%B. Four groups were created based on the median HOMA-%S and HOMA-%B values: group 1, high insulin resistance and preserved beta cell function; group 2, high insulin resistance and impaired beta cell function; group 3, low insulin resistance and preserved beta cell function; group 4, low insulin resistance and impaired beta cell function (reference group). Mortality and diabetes complications were registered with a follow-up of 15 years. The associations between the four groups and mortality/complications were estimated by Cox regression adjusted for gender and age at diabetes diagnosis in model 1, and also for smoking, hypertension, BMI, and total cholesterol in model 2. In the figure a Kaplan-Meier plot is displayed not including adjustments for confounding factors. Results: Total mortality in the four groups is displayed in the figure. Both groups with high insulin resistance had higher total mortality (group 1: HR 1.58, 95% CI 1.06−2.36; group 2: HR 1.85, 95% CI 1.20-2.84) than group 4. Fasting C-peptide, as a continuous variable, was independently associated with total mortality (HR 1.29, 95% CI 1.11−1.49) and cancer mortality (HR 1.42, 95% CI 1.09−1.84). Conclusion: Insulin resistance was an independent risk factor for total mortality. Thus, treatment of type 2 diabetes should focus not only on normalizing blood glucose levels, but also reducing insulin resistance.