In cultured rat hepatocytes, transcription of the glucokinase gene is turned on by insulin and turned off by glucagon/cAMP, the latter being the dominant effector system. It is thus possible that in the absence of hormones the gene is maintained in a repressed state by the basal level of cAMP and that insulin turns on transcription by relieving cAMP repression, for instance via activation of a cyclic-nucleotide phosphodiesterase. Three inhibitors of this class of enzymes were tested for their effect on the insulin-dependent induction of the glucokinase gene in hepatocytes. Isobutyl methylxanthine, the prototype inhibitor, abrogated the gene response to insulin, as shown by run-on transcription assay. Among the drugs investigated, Ly186126, a preferential inhibitor of type-III phosphodiesterase, proved the most potent in inhibiting insulin-induced accumulation of glucokinase mRNA. Type-III phosphodiesterase is inhibited by cGMP. Induction of glucokinase mRNA was prevented in hepatocytes challenged with insulin in presence of 8-bromoguanosine-3',5'-phosphate. These results are consistent with the involvement of type-III phosphodiesterase in transduction of the insulin signal to the glucokinase gene. However, we were unable to detect significant decreases in total cellular cAMP level or cAMP-dependent-protein-kinase ratio after the addition of insulin to hepatocytes. Many effects of glucagon are mediated via cAMP-dependent protein-kinase phosphorylation of regulatory proteins and, conversely, insulin effects are often accompanied by protein dephosphorylation. A specific inhibitor of protein phosphatases PP1 and PP2A, okadaic acid, was shown to abolish the transcriptional response of the glucokinase gene to insulin. Thus, interference of insulin with the cAMP signal transduction pathway at several steps may be a critical aspect of insulin action on hepatic glucokinase gene expression. In addition, insulin induction of glucokinase mRNA was suppressed by inhibitors of protein synthesis. The underlying mechanism was a severe inhibition of the transcriptional effect of insulin, rather than mRNA destabilization, as demonstrated by run-on transcription assays with nuclei from cycloheximide-treated or pactamycin-treated cells. Transcription of the glucokinase gene may therefore depend on de novo synthesis of the product of an early-response gene induced by insulin, or may require a short-lived trans-acting or accessory factor of transcription. Alternatively, insulin signalling may be compromised in hepatocytes by a mechanism indirectly related to the arrest of protein synthesis.