Vertical sleeve gastrectomy (VSG) has gained interest as a low morbidity bariatric surgery, which is effective in producing weight loss and causing type 2 diabetes resolution. However, the efficacy of VSG to prevent the onset of type 2 diabetes has not been previously investigated. VSG or sham surgery was performed on 2-month-old prediabetic male University of California Davis-type 2 diabetes mellitus rats. Sham-operated animals were either sham-operated ad libitum fed (S-AL) or were weight-matched to VSG-operated animals (S-WM). Diabetes onset was determined by weekly nonfasting blood glucose measurements. Animals underwent oral glucose tolerance tests at 1 and 4 months after surgery and indirect calorimetry at 1.5 months after surgery. VSG surgery significantly delayed diabetes onset compared with both S-AL and S-WM animals. VSG-operated animals ate 23% less and weighed 20% less than S-AL. Energy expenditure did not differ between VSG-operated animals and controls. Results from the oral glucose tolerance tests demonstrate improved glucose tolerance and islet function in VSG-operated animals compared with S-AL and S-WM. Nutrient-stimulated glucagon-like peptide (GLP)-1, GLP-2, and peptide YY excursions were greater in VSG-operated animals. VSG surgery resulted in decreased fasting plasma insulin, ghrelin and lipid concentrations, and markedly higher fasting plasma adiponectin and bile acid concentrations, independent of body weight. Increases of circulating bile acid concentrations were due to selective increases of taurine-conjugated bile acids. Thus, VSG delays type 2 diabetes onset in the University of California Davis-type 2 diabetes mellitus rat, independent of body weight. This is potentially mediated by increases of circulating bile acids, adiponectin, and nutrient-stimulated GLP-1 secretion and decreased circulating ghrelin concentrations.