African Americans (AAs) tend to have higher plasma insulin concentrations than European Americans (EAs); the increased insulin concentrations have been attributed to increased secretion and/or decreased insulin clearance by liver or other tissues. This work characterizes the contributions of hepatic versus extrahepatic insulin degradation related to ethnic differences between AAs and EAs. By using a recently developed mathematical model that uses insulin and C-peptide measurements from the insulin-modified, frequently sampled intravenous glucose tolerance test (FSIGT), we estimated hepatic versus extrahepatic insulin clearance in 29 EA and 18 AA healthy women. During the first 20 min of the FSIGT, plasma insulin was approximately twice as high in AAs as in EAs. In contrast, insulin was similar in AAs and EAs after the 20–25 min intravenous insulin infusion. Hepatic insulin first-pass extraction was two-thirds lower in AAs versus EAs in the overnight-fasted state. In contrast, extrahepatic insulin clearance was not lower in AAs than in EAs. The difference in insulin degradation between AAs and EAs can be attributed totally to liver clearance. The mechanism underlying reduced insulin degradation in AAs remains to be clarified, as does the relative importance of reduced liver clearance to increased risk for type 2 diabetes.