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Aims: We investigated quantitative expression, mutual aggregation and relation with hyperglycemia of insulin resistance (IR) and beta‐cell dysfunction (BCD) in newly diagnosed type 2 diabetes. Methods: We assessed IR with euglycemic hyperinsulinemic clamp and BCD with modelled glucose/C‐peptide response to oral glucose in 729 mostly drug‐naïve patients. We measured glycated hemoglobin, pre‐prandial, post‐prandial and meal‐related excursion of blood glucose. Results: IR was found in 87.8% [95% confidence intervals 85.4–90.2] and BCD in 90.0% [87.8–92.2] of subjects, ranging from mild to moderate or severe. Approximately 20% of subjects had solely one defect: BCD 10.8% [8.6–13.1] or IR 8.6% [6.6–10.7]. Insulin resistance and BCD aggregated in most subjects (79.1% [76.2–82.1]). We arbitrarily set nine possible combinations of mild, moderate or severe IR and mild, moderate or severe BCD, finding that each had a similar frequency (∼10%). In multiple regression analyses parameters of glucose control were related more strongly with BCD than with IR. Conclusions: In newly‐diagnosed type 2 diabetes, IR and BCD are very common with a wide range of expression but no specific pattern of aggregation. Beta‐cell dysfunction is likely to play a greater quantitative role than IR in causing/sustaining hyperglycemia in newly‐diagnosed type 2 diabetes. [ABSTRACT FROM AUTHOR]