Objective The diminished incretin effect observed in type 2 diabetes mellitus (T2DM) has been suggested due to decreased insulin secretory capacity. In this study, we examined the relation between beta cell function and incretin effect. Methods We performed the hyperglycemic clamp targerting 280 mg/dL for 120 min with administration of 75 gram oral glucose at 60 min in subjects with normal glucose tolerance (NGT, n = 9), impaired glucose tolerance (n = 6), and T2DM (n = 6). First- and second-phase insulin secretion was calculated by the incremental area under the curves (iAUCs) of insulin during first 10 min and between 10 and 60 min, respectively. The incretin effect was calculated by iAUCs of insulin after oral glucose load. Results The first phase insulin secretion was significantly higher in the NGT than the T2DM (P = 0.001) and the second phase insulin secretion tended to be higher in the NGT than the T2DM. The incretin effect was more than 6 times higher in the NGT than the T2DM (P = 0.002). The first and second phase insulin secretion was significantly correlated with the incretin effect in all subjects (r2 = 0.579, P < 0.001 and r2 = 0.329, P = 0.007). Plasma levels of incretin hormone were not significantly different between groups. Conclusion Decreased incretin effect in T2DM could be explained by the diminished insulin secretory capacity per se.