Phase I, 6 weeks: Intensive weight loss 42 obese subjects with type 2 diabetes mellitus or impaired fasting glucose (FBS greater than 100 mg/dl) and a patient at the Nutrition and Weight Management Center at Boston Medical Center will be randomized to receive either an MCT-based or LCT-based liquid diet for a 6 week period (Phase I) to establish compliance followed by a second 6 week period (Phase II). These diets will be isocaloric (1083 kcal/day) and identical except for the quality of the fat. The intervention will be double blinded. The MCT diet will consist of 5 liquid meals using a commercial product plus 34 grams MCT oil (Life Enhancement Products, Inc. Petaluna, CA; 8.3 kcal/gm) added per day to the HMR shakes. The LCT diet will utilize 5 HMR shakes plus 31.5 grams LCT oil (corn oil; 9 kcal/gm) per day. Patients in both groups will be given a list of supplemental foods that are suitable for the study. They may choose to eat up to an additional 400 kcal per day from this list and will be asked to add these to their food records for monitoring of their caloric intake. A dietitian will instruct subjects at a baseline visit on behavior modification and a moderate physical activity program. Baseline testing includes the following: Body composition by DEXA (Hologic); Subcutaneous abdominal adipose tissue biopsy; blood work. Subjects who do not lose 5% of their baseline weight by the end of Phase I will be withdrawn from the study. If subjects do not lose 5% in Phase I, they will be considered inappropriate for a liquid diet, and therefore for the study, and will be discontinued from the study.

Phase II, 6 weeks: Continued weight loss program during phase II, subjects will be maintained on the same diet, supplements and exercise program. Once patients enter Phase II, all baseline lab measurements will be repeated. Needle biopsies of subcutaneous abdominal adipose tissue will be obtained at the beginning and at at the end of Phase II. Finger-stick blood glucose levels will be checked weekly. At the end of Phase II, and of the study, fasting blood work will be obtained. At the end of Phase II, the following procedures will be performed: Subcutaneous abdominal adipose tissue biopsy (total = 3). Body composition by DEXA (Hologic) (total = 2).

Phase I, 6 weeks: Intensive weight loss forty-two obese subjects with type 2 diabetes mellitus or impaired fasting glucose (FBS greater than 100 mg/dl) will be randomized to receive either an MCT-based or LCT-based liquid diet for a 6 week period (Phase I) to establish compliance followed by a second 6 week period (Phase II). These diets will be isocaloric (1083 kcal/day) and identical except for the quality of the fat . The intervention will be double blinded. The MCT diet will consist of 5 liquid meals using a commercial product (HMR 800 Health Management Resources, Inc.; 160 kcal/shake) plus 34 grams MCT oil (Life Enhancement Products, Inc. Petaluna, CA; 8.3 kcal/gm) added per day to the HMR shakes. The LCT diet will utilize 5 HMR shakes plus 31.5 grams LCT oil (corn oil; 9 kcal/gm) per day. Patients in both groups will be given a list of supplemental foods that are suitable for the study. They may choose to eat up to an additional 400 kcal per day from this list and will be asked to add these to their food records for monitoring of their caloric intake. A dietitian will instruct subjects at a baseline visit on behavior modification and a moderate physical activity program of walking for 30 minutes five times per week. Participants will complete food and exercise logs that will be analyzed by the study staff. Baseline testing includes the following: Body composition by DEXA (Hologic); Subcutaneous abdominal adipose tissue biopsy; blood for CBC, basic metabolic panel, LFT, TSH, C-reactive protein, HOMA-IR, fasting glucose, insulin, lipids (total cholesterol, HDL, LDL, triacyglycerol), hemoglobin A1c, hydroxybutyrate, free fatty acids, leptin, adiponectin, TNF-alpha, and PAI-1. For measuring dietary compliance throughout the entire study, three consecutive daily dietary records (two week day and one weekend day) will be analyzed each week by a registered dietitian using the Minnesota Nutrient Database. Subjects who do not lose 5% body weight by the end of Phase I will be withdrawn from the study. If subjects do not lose 5% in Phase I, they will be considered inappropriate for a liquid diet, and therefore for the study, and will be discontinued from the study.

Phase II, 6 weeks: Continued weight loss program During phase II, subjects will be maintained on the same diet, supplements and exercise program.Once patients enter Phase II, all baseline lab measurements will be repeated. Needle biopsies of subcutaneous abdominal adipose tissue will be obtained at the beginning and at at the end of Phase II. Finger-stick blood glucose levels will be checked weekly. At the end of Phase II, and of the study, the following data will be collected: Lab data: CBC, basic metabolic panel, LFT, TSH, C-reactive protein, fasting blood glucose, insulin, HOMA-IR, lipids (total cholesterol, HDL, LDL, triacyglycerol), HbA1c, hydroxybutyrate, FFA, leptin, adiponectin, TNF-alpha, and PAI-1 levels. At the end of Phase II, the following procedures will be performed: Subcutaneous abdominal adipose tissue biopsy (total = 3) ;. Body composition by DEXA (Hologic) (total = 2).

Inclusion Criteria:

• Patient of the Nutrition and Weight Management Center at Boston Medical Center
• Obese ( BMI equal or greater to 30 kg/m2
• Men and women
• Age more than or equal to 18 years
• Type 2 diabetes mellitus controlled by diet or use of Metformin or Impaired fasting glucose (FBS more than or equal to 100 mg/dl)
• Only diet-controlled diabetics or those on Metformin will be considered since all classes of anti-diabetic agents have different effects on appetite and body weight, which may confound the interpretation of study results.

Exclusion Criteria:

• Currently not a patient at the Nutrition and Weight Management Center at Boston Medical Center
• Need for oral anti-diabetic agents (other than Metformin)
• Abnormal thyroid status: hyperthyroidism or hypothyroidism (TSH less than 0.5 or more than 5.0)
• Significant liver disease (bilirubin more than or equal to 2.0 or liver enzyme more than 3 times upper limited of normal range)
• Significant renal disease (creatinine more than or equal to 2.0)
• On the following medications known to affect carbohydrate and lipid metabolism: steroids, Beta adrenergic blockers, diuretics, insulin, and hypolipidemic agents
• Use of prescription or over the counter weight loss medications
• Weight loss of >5% or more in the last three (3) months
• Anorexia nervosa or bulimia nervosa
• Pregnancy or lactation
• Significant lactose intolerance
• Significant egg allergy
• History of drug or alcohol addiction.