Abstract Context Tirzepatide is a glucose-dependent insulinotropic polypeptide and glucagon-like peptide-1 receptor agonist approved for treatment of type 2 diabetes (T2D). SURPASS-1, a phase 3 trial of tirzepatide monotherapy in people with early T2D, enables evaluating effects of tirzepatide on pancreatic beta-cell function and insulin sensitivity (IS) without other background antihyperglycemic medications. Objective Explore changes in biomarkers of beta-cell function and IS with tirzepatide monotherapy. Design Post hoc analyses of fasting biomarkers with analysis of variance and mixed model repeated measures. Setting Forty-seven sites in 4 countries. Patients Four hundred seventy-eight T2D participants. Intervention Tirzepatide (5, 10, 15 mg), placebo. Main Outcome Measure(s) Analyze biomarkers of beta-cell function and IS at 40 weeks. Results At 40 weeks, markers of beta-cell function improved with tirzepatide monotherapy vs placebo with reductions from baseline in fasting proinsulin levels (49-55% vs −0.6%) and in intact proinsulin/C-peptide ratios (47-49% vs −0.1%) (P < .001, all doses vs placebo). Increases from baseline in homeostatic model assessment for beta-cell function (computed with C-peptide) (77-92% vs −1.4%) and decreases in glucose-adjusted glucagon levels (37-44% vs +4.8%) were observed with tirzepatide vs placebo (P < .001, all doses vs placebo). IS improved as indicated by reductions from baseline in homeostatic model assessment for insulin resistance (9-23% vs +14.7%) and fasting insulin levels (2-12% vs +15%), and increases in total adiponectin (16-23% vs −0.2%) and insulin-like growth factor binding protein 2 (38-70% vs +4.1%) with tirzepatide vs placebo at 40 weeks (P ≤ .031, all doses vs placebo, except for fasting insulin levels with tirzepatide 10 mg). Conclusions As monotherapy for early T2D, tirzepatide achieved significant improvements in biomarkers of both pancreatic beta-cell function and IS.