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Aims/hypothesis: Incretin effect-the potentiation of glucose-stimulated insulin release induced by the oral vs the i.v. route-is impaired in dysglycaemic states. Despite evidence from human islet studies that NEFA interfere with incretin function, little information is available about the effect in humans. We tested the impact of acute bidirectional NEFA manipulation on the incretin effect in humans., Methods: Thirteen individuals with type 2 diabetes and ten non-diabetic volunteers had a 3 h OGTT, and, a week later, an i.v. isoglycaemic glucose infusion (ISO; OGTT matched). Both pairs of studies were repeated during an exogenous lipid infusion in the non-diabetic volunteers, and following acipimox administration (to inhibit lipolysis) in people with diabetes. Mathematical modelling of insulin secretion dynamics assessed total insulin secretion (TIS), beta cell glucose sensitivity (β-GS), glucose-induced potentiation (P GLU ) and incretin-induced potentiation (P INCR ); the oral glucose sensitivity index was used to estimate insulin sensitivity., Results: Lipid infusion increased TIS (from 61 [interquartile range 26] to 78 [31] nmol/m 2 on OGTT and from 29 nmol/m 2 [26] to 57 nmol/m 2 [30] on ISO) and induced insulin resistance. P INCR decreased from 1.6 [1.1] to 1.3 [0.1] (p < 0.05). β-GS, P GLU and glucagon, glucagon-like peptide 1 (GLP-1) and gastric inhibitory polypeptide (GIP) responses were unaffected. Acipimox (lowering NEFA by ~55%) reduced plasma glucose and TIS and enhanced insulin sensitivity, but did not change β-GS, P INCR , P GLU or glucagon, GLP-1 or GIP responses. As the per cent difference, incretin effect was decreased in non-diabetic participants and unchanged in those with diabetes., Conclusions/interpretation: Raising NEFA selectively impairs incretin effect and insulin sensitivity in non-diabetic individuals, while acute NEFA reduction lowers plasma glucose and enhances insulin sensitivity in people with diabetes but does not correct the impaired incretin-induced potentiation.