Type 2 diabetes is a progressive disease and most patients with type 2 diabetes eventually need insulin therapy. The objective of this study was to clarify C-peptide immunoreactivity (CPR), a marker of beta cell function, as a predictor of requirement for insulin therapy. We conducted a retrospective study of 579 consecutive subjects with type 2 diabetes who were admitted to our hospital from 2000 to 2007 and were able to be followed up for at least 6 months after discharge. Fasting and postprandial serum CPR and urinary CPR levels had been measured during admission. Information about insulin therapy at the last visit was obtained from medical records. At the last visit, 364 subjects (62.9%) were treated with insulin. Mean interval between discharge and the last visit was 4.5 ± 2.3 years. Serum and urine CPR levels at baseline were significantly associated with insulin treatment at the last visit (P<0.001 for all). Among CPR values, postprandial serum CPR to plasma glucose ratio (CPR index) showed the greatest area under the receiver operating characteristic (ROC) curve for insulin therapy. Multivariate logistic regression analysis evaluating the effect of postprandial CPR index adjusted for other confounders showed consistent results with unadjusted results. In conclusion, beta cell dysfunction is significantly correlated with future insulin therapy in patients with type 2 diabetes. Our study indicates that among CPR measurements, postprandial CPR index is the best predictive marker for future insulin therapy.