The liver plays a central role in the control of glucose homeostasis and is subject to complex regulation by substrates, insulin, and other hormones. To investigate the effect of the loss of direct insulin action in liver, we have used the Cre-loxP system to inactivate the insulin receptor gene in hepatocytes. Liver-specific insulin receptor knockout (LIRKO) mice exhibit dramatic insulin resistance, severe glucose intolerance, and a failure of insulin to suppress hepatic glucose production and to regulate hepatic gene expression. These alterations are paralleled by marked hyperinsulinemia due to a combination of increased insulin secretion and decreased insulin clearance. With aging, the LIRKO liver exhibits morphological and functional changes, and the metabolic phenotype becomes less severe. Thus, insulin signaling in liver is critical in regulating glucose homeostasis and maintaining normal hepatic function.