Abstract Context: There is little overlap between diabetes diagnosed by glycated hemoglobin (HbA1c) and blood glucose, and it is unclear which pathophysiological defects are captured when using HbA1c for diagnosis. Objective: We examined and compared the relationship between insulin sensitivity and β-cell function in different subphenotypes of prediabetes and type 2 diabetes (T2D). Design, Setting, and Participants: A cross-sectional analysis of the Danish ADDITION-PRO study was performed (n = 1713). Participants without known diabetes were classified into subgroups of prediabetes and T2D based on fasting or 2-hour glucose criteria or HbA1c. Insulin sensitivity and insulin release were determined from glucose and insulin concentrations during the oral glucose tolerance test, and disposition indices were calculated. Results: Individuals with prediabetes or T2D diagnosed by fasting glucose had lower absolute insulin release (P ≤ .01) and higher insulin sensitivity in response to glucose intake (P ≤ .01) but a similar disposition index (P ≥ .36), compared with individuals with elevated 2-hour glucose concentrations. Individuals with HbA1c-defined T2D or prediabetes had a mixture of the pathophysiological defects observed in the glucose-defined subgroups, and individuals with normoglycemia by HbA1c had worse pathophysiological abnormalities than individuals with normoglycemia by the glucose criteria. Conclusions: On average, the diagnostic HbA1c criteria for diabetes and prediabetes identified individuals with a mixture of the pathophysiological characteristics found when using the glucose criteria, but the diversity and pathophysiology captured by the oral glucose tolerance test cannot be captured when applying the more simple HbA1c criteria. Whether the disease progression and prognosis will differ in individuals diagnosed by fasting glucose, 2-hour glucose, or HbA1c should be examined in longitudinal studies.