OBJECTIVE To determine whether β-cell hyperresponsiveness and insulin resistance in youth versus adults in the Restoring Insulin Secretion (RISE) Study are related to increased glucagon release. RESEARCH DESIGN AND METHODS In 66 youth and 350 adults with impaired glucose tolerance (IGT) or recently diagnosed type 2 diabetes (drug naive), we performed hyperglycemic clamps and oral glucose tolerance tests (OGTTs). From clamps we quantified insulin sensitivity (M/I), plasma fasting glucagon and C-peptide, steady-state glucagon and C-peptide at glucose of 11.1 mmol/L, and arginine-stimulated glucagon (acute glucagon response [AGR]) and C-peptide (ACPRmax) responses at glucose >25 mmol/L. RESULTS Mean ± SD fasting glucagon (7.63 ± 3.47 vs. 8.55 ± 4.47 pmol/L; P = 0.063) and steady-state glucagon (2.24 ± 1.46 vs. 2.49 ± 1.96 pmol/L, P = 0.234) were not different in youth and adults, respectively, while AGR was lower in youth (14.1 ± 5.2 vs. 16.8 ± 8.8 pmol/L, P = 0.001). Significant age-group differences in insulin sensitivity, fasting C-peptide, steady-state C-peptide, and ACPRmax were not related to glucagon. Fasting glucose and glucagon were positively correlated in adults (r = 0.133, P = 0.012) and negatively correlated in youth (r = −0.143, P = 0.251). In both age-groups, higher fasting glucagon was associated with higher fasting C-peptide (youth r = 0.209, P = 0.091; adults r = 0.335, P < 0.001) and lower insulin sensitivity (youth r = −0.228, P = 0.066; adults r = −0.324, P < 0.001). With comparable fasting glucagon, youth had greater C-peptide and lower insulin sensitivity. OGTT suppression of glucagon was greater in youth. CONCLUSIONS Youth with IGT or recently diagnosed type 2 diabetes (drug naive) have hyperresponsive β-cells and lower insulin sensitivity, but their glucagon concentrations are not increased compared with those in adults. Thus, α-cell dysfunction does not appear to explain the difference in β-cell function and insulin sensitivity in youth versus adults.