Background: Altering dietary carbohydrate or fat content may have chronic effects on insulin secretion and sensitivity, which may vary with individual metabolic phenotype. Objective: The objective was to evaluate the contribution of tightly controlled diets differing in carbohydrate and fat content for 8 wk to insulin sensitivity and β cell responsiveness and whether effects of diet would vary with race, free-living diet, or insulin response. Design: Healthy overweight men and women (36 European Americans, 33 African Americans) were provided with food for 8 wk and received either a eucaloric standard diet (55% carbohydrate, 27% fat) or a eucaloric reduced-carbohydrate (RedCHO)/higher-fat diet (43% carbohydrate, 39% fat). Insulin sensitivity and β cell responsiveness were assessed at baseline and 8 wk by using a liquid meal tolerance test. Results: Insulin sensitivity did not change with diet (P = 0.1601). Static β cell response to glucose (ΦS) was 28.5% lower after the RedCHO/higher-fat diet. Subgroup analyses indicated that lower ΦS with the RedCHO/higher-fat diet occurred primarily among African Americans. A significant inverse association was observed for change in glucose area under the curve compared with change in ΦS. Conclusions: Consumption of a eucaloric 43% carbohydrate/39% fat diet for 8 wk resulted in down-regulation of β cell responsiveness, which was influenced by baseline phenotypic characteristics. Further study is needed to probe the potential cause-and-effect relation between change in ΦS and change in glucose tolerance. This trial is registered at clinicaltrials.gov as NCT00726908. © 2011 American Society for Nutrition.