Relative to Caucasians (C), African-American (AA) children and adults have lower indices of insulin sensitivity (Si) and a higher acute insulin response to glucose (AIRg). Among AA children, AIRg is greater than that which would be predicted based on lower Si. The objectives of the present study were 1) to determine whether insulin secretory parameters differ in AA vs. C children and adolescents using C-peptide modeling, 2) to determine whether hepatic insulin extraction differs with ethnicity/race using the C-peptide to insulin molar ratio, and 3) to determine whether the relatively greater AIRg among African-Americans is due to greater insulin secretion or lesser clearance. Subjects (n = 76) were AA and C children (mean age, ∼11 yr). A 3-h tolbutamide-modified iv glucose tolerance test and minimal modeling were used to determine Si and AIRg. First phase C-peptide/insulin secretion and basal, first, and second phase β-cell sensitivity to glucose were determined using C-peptide modeling with standard kinetic parameters developed in adults. The incremental C-peptide to insulin molar ratio over the 3-h test period, an index of hepatic insulin extraction, was calculated with the trapezoidal method. Si was lower and AIRg was higher in AA vs. C children. First phase C-peptide/insulin secretion and first phase β-cell sensitivity to glucose were approximately 2-fold greater in AA vs. C children (P < 0.001); there were no between-group differences in basal or second phase β-cell sensitivity to glucose. Hepatic insulin extraction was lower in AA vs. C (3.77 ± 1.78% vs. 5.99 ± 2.18%; P < 0.001). Multiple linear regression modeling indicated that first phase C-peptide/insulin secretion and hepatic insulin extraction contributed independently to AIRg; however, it was only first phase C-peptide/insulin secretion that explained the significant independent contribution of ethnicity/race to AIRg after adjusting for Si. The results of this study suggest that greater AIRg among AA is due to both greater insulin secretion and lesser hepatic insulin extraction, and that AIRg above that predicted based on lower Si is due to greater insulin secretion. The insulin secretion data await verification that the kinetic parameters used apply to children and AA.