The prevalence of diabetes has increased to 8% of population. Unlike type 2 diabetes in the western countries, Korean diabetic patients are nonobese and have low serum insulin levels. As the increased prevalence of diabetes and the peculiar characteristics may be related to dietary fat contents, we determined their effects on insulin resistance, insulin secretion and pancreatic $eta-cell$ mass in 90% pancreatectomized (Px) diabetic rats in the present study. The rats were provided with low fat diet (LF, 10 energy% fat), moderate fat diet (MF, 25 energy% fat) and high fat diet (HF, 40 energy% fat) for 6 months. HF increased body weight and epidydimal fat pads parallel with increased food intake compared to LF and MF. Fasting serum glucose and insulin levels and homeostasis model assessment of insulin resistance were higher in HF, compared to LF and MF, indicating that HF increased insulin resistance. Rats fed LF and MF diets reduced insulin resistance, but only rats fed MF improved pancreatic $eta-cell$ mass and insulin secretion capacity, measured by hyperglycemic clamp and in situ pancreatic perfusion. LF had low insulin secretion capacity and pancreatic $eta-cell$ mass, indicating the increased possibility of diabetic prevalence and progression. MF increased $eta-cell$ mass by stimulating $eta-cell$ proliferation and neogenesis and reducing $eta-cell$ apoptosis. In conclusion, MF is effective for the prevention of prevalence and progression of diabetes.