Weight loss achieved through gastric banding will be superior to treatment with metformin in preserving or restoring pancreatic beta cell function in people with prediabetes or mild type 2 diabetes.

BetaFat is a 2-arm, unblinded study to compare gastric banding to treatment with metformin over a 24-month period in moderately obese adults with pre- or mild type 2 diabetes. The primary outcome will be change in β-cell compensation for insulin resistance, which the investigators will compare between groups. Secondary analyses will include other potential markers of β-cell health and potential mediators of treatment-specific effects. The main focus will be on mediators related to obesity. Clinically, the project will serve as a test of concept for use of gastric banding relatively early in the spectrum of obesity and β-cell disease. Biologically, the results will provide crucial information on potential mediators of β-cell failure and its arrest or reversal in the context of obesity. Those mediators will guide the development of more effective treatment and monitoring for the β-cell disease that causes type 2 diabetes.

Inclusion Criteria:

1. Prior completion of at least two months in a diet, exercise and lifestyle intervention program within the past two years
2. Fasting plasma glucose >90 mg/dl plus 2-hour glucose ≥140 mg/dl on 75 gm OGTT plus HbA1C ≤7.0%. There is no lower limit for the A1C and no upper limit for the OGTT 2-hour glucose based on prior studies that allow us to identify people with falling β-cell function
3. Age 22-65 years
4. Body mass index (BMI) 30-40 kg/m2
5. For participants with diabetes, known duration <1 year
6. No history of use of antidiabetic medications except during pregnancy

Exclusion Criteria:

1. Contraindications to LapBand(see Appendix 1)

2. Contraindication to MRI (claustrophobia; permanent metal objects such as pacemakers, prostheses, aneurysm clips)

3. Underlying disease(s) likely to (a) limit life span to less than study duration and/or (b) increase risk of intervention outside of the study and/or (c) limit ability to participate in outcomes assessment and/or (d) limit participation

4. An underlying disease known to have important effects on glucose metabolism

5. Active infections

6. Renal disease (serum creatinine ≥1.4 mg/dl for men; ≥1.3 mg/dl for women) or serum potassium abnormality (<3.4 or >5.5 mmol/l)

7. Anemia (hemoglobin <11g/dl in women, <12 g/dl in men) or known coagulopathy

8. Cardiovascular disease, including uncontrolled hypertension and symptomatic congestive heart failure. Participants must be able to safely tolerate administration of fluid/volume challenges during clamp studies.

9. Serum AST >3 times upper limit of normal in local clinical lab

10. Excessive alcohol intake

11. Suboptimally treated thyroid disease

12. Conditions or behaviors likely to affect the conduct of the study

    1. unable or unwilling to give informed consent
    2. unable to adequately communicate with clinic staff
    3. another household member is a participant or staff member
    4. current or anticipated participation in another intervention research project that would interfere with any of the interventions/outcomes
    5. likely to move away from participating clinic in next 2 years
    6. current (or anticipated) pregnancy and lactation.
    7. major psychiatric disorder that, in the opinion of clinic staff, would impede the conduct of the study
    8. weight loss >5% in past three months for any reason except postpartum weight loss.

13. additional conditions may serve as criteria for exclusion at the discretion of the local site

24 months