Objective To characterize and compare the beta-cell function and insulin resistance among Peruvian adolescents with type 2 diabetes (T2D) and their non-diabetic, overweight and lean peers. Methods Cross-sectional study of 54 adolescents aged 10–19 years, distributed in three sex- and age-matched groups (n = 18): (i) adolescents with T2D; (ii) overweight adolescents without T2D; and (iii) lean adolescents without T2D, at the Diabetes, Obesity and Nutrition Research Center in Lima, Peru. Fasting glucose, insulin, C-peptide, and glycated hemoglobin were measured for all participants. In addition, a two-hour oral glucose tolerance test (OGTT, 1.75 mg of glucose/kg body weight) was performed, during which glucose and C-peptide were quantified. The homeostasis model assessment of insulin resistance (HOMA-IR) and beta-cell function (HOMA-B) were derived for all participants, and beta-cell function was further examined by the area under the curve (AUC) of C-peptide. Results The median HOMA-IR score was higher in adolescents with T2D compared to lean adolescents (6.1 vs. 2.1; p = 0.002), but was not different from that of overweight adolescents (6.1 vs. 4.0; p = 0.322). The median HOMA-B was higher in overweight adolescents than in lean adolescents (256.9 vs. 134.2; p = 0.015), and adolescents with T2D (256.9 vs. 119.8; p = 0.011). The mean AUC of glucose in adolescents with T2D was 1.8-fold higher than that of overweight adolescents, and 1.9-fold higher than that of lean adolescents (p < 0.001). Although the median AUC of C-peptide in adolescents with T2D was lower than that of overweight and lean adolescents, this difference was not statistically significant (230.7 vs. 336.6 vs. 267.3 nmol/l120 min, respectively; p = 0.215). Conclusion Among Peruvian adolescents with T2D, insulin resistance is the most prominent characteristic, rather than beta-cell dysfunction.