Previous cross-sectional studies show that puberty is associated with a reduction in insulin sensitivity (S_I), but no longitudinal studies have examined this change in detail. This study is a longitudinal study in 60 children (33 male and 27 female subjects; 32 Caucasian and 28 African-American) examined at Tanner stage I (age 9.2 ± 1.4 years) and after 2.0 ± 0.6 years of follow-up, by which time 29 children remained at Tanner stage I and 31 had progressed to Tanner stage III or IV. Tanner stage was assessed by physical examination. S_I, the acute insulin response (AIR), and the disposition index (DI) were determined by the tolbutamide-modified intravenous glucose tolerance test and minimal modeling, body fat mass was assessed by dual-energy X-ray absorptiometry, visceral fat was determined by computed tomography, and fasting blood was analyzed for hormone levels. In children progressing to Tanner stage III, S_I fell significantly by 32% (4.4 ± 3.0 to 3.0 ± 1.7 × 10⁻⁴min⁻¹/[μIU/ml]), AIR increased by 30%, DI fell by 27%, and there was a significant increase in fasting glucose (93.5 ± 5.0 to 97.0 ± 4.1 mg/dl) and insulin (14.3 ± 8.1 to 18.6 ± 11.0 μIU/ml). In children remaining at Tanner stage I, there was a slight increase in S_I (6.4 ± 3.1 to 7.4 ± 3.5 × 10⁻⁴min⁻¹/[μIU/ml]) with no significant change in AIR or fasting glucose and insulin. The pubertal fall in S_I was more consistent in African-Americans; remained significant after controlling for age, sex, and change in fat mass, visceral fat, and fat-free mass; and was similar in children at low, medium, and high body fat. Change in S_I was not significantly related to change in fasting hormone levels, but change in AIR was significantly related to change in androstendione (r = 0.39; P = 0.04). Pubertal transition from Tanner stage I to Tanner stage III was associated with a 32% reduction in S_I, and increases in fasting glucose, insulin, and AIR. These changes were similar across sex, ethnicity, and obesity. The significant fall in DI suggests conservation in β-cell function or an inadequate β-cell response to the fall in S_I. The fall in S_I was not associated with changes in body fat, visceral fat, IGF-I, androgens, or estradiol.