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Abstract In early type 2 diabetes, the strategy of “induction” with short-term intensive insulin therapy followed by “maintenance” with metformin can stabilize pancreatic beta-cell function in some patients but not others. We thus sought to elucidate determinants of sustained stabilization of beta-cell function. In this secondary analysis of ClinicalTrials.Gov NCT02192424, adults with ≤5-years diabetes duration were randomized to 3-weeks induction insulin therapy (glargine/lispro) followed by metformin maintenance either with or without intermittent 2-week courses of insulin every 3-months for 2-years. Sustained stabilization (higher beta-cell function at 2-years than at baseline) was achieved in 55 of 99 participants. Independent predictors of sustained stabilization were the change in beta-cell function during induction and changes in hepatic insulin resistance and alanine aminotransferase during maintenance. Thus, initial reversibility of beta-cell dysfunction during induction and subsequent preservation of hepatic insulin sensitivity during maintenance are associated with sustained stabilization of beta-cell function following short-term insulin and metformin. ClinicalTrials.Gov NCT02192424