Twenty multiparous cows were fed additional concentrate during the final 30 d prepartum to cause susceptibility to fatty liver. From 14 to 42 d postpartum, all cows were subjected to a protocol to induce fatty liver and ketosis. To test glucagon as a treatment for fatty liver, either glucagon at 10 mg/d or excipient was infused via the jugular vein from 21 to 35 d postpartum. All cows had fatty liver at 14 d postpartum and became ketonemic and hypoglycemic during the induction of ketosis. Glucagon increased plasma glucose to 142% of that of controls throughout the 14-d treatment. The hypoinsulinemia present in cows with fatty liver was not affected by glucagon. Plasma beta-hydroxybutyrate and nonesterified fatty acids were decreased by glucagon. At 6 d postpartum, liver triacylglycerol averaged 12.9% of liver (wet weight basis). Glucagon had decreased triacylglycerol content of livers by 71% at d 35. Glycogen was 1.0% of the wet weight of livers at 6 d in milk, but it was decreased by glucagon to 0.5% at 2 d after glucagon began. Glycogen then increased in cows treated with glucagon until at 38 d in milk liver glycogen was 3.7% versus 1.6% in controls. Our results document that glucagon decreases the degree of fatty liver in early lactation dairy cows, which also decreases the incidence of ketosis after alleviation of fatty liver.