Maintaining blood glucose levels within a narrow range is a critical physiological function requiring multiple metabolic pathways and involving several cell types, including a prominent role for hepatocytes. Under hormonal control, hepatocytes can respond to either feeding or fasting conditions by storing or producing glucose as necessary. In the fasting state, the effects of glucagon avoid hypoglycemia by stimulating glucogenesis and glycogenolysis and initiating hepatic glucose release. Postprandially, insulin prevents hyperglycemia, in part, by suppressing hepatic gluconeogenesis and glycogenolysis and facilitating hepatic glycogen synthesis. Both transcriptional regulation of rate limiting enzymes and modulation of enzyme activity through phosphorylation and allosteric regulation are involved. Type 2 diabetes mellitus is the most common serious metabolic condition in the world, and results from a subnormal response of tissues to insulin (insulin resistance) and a failure of the insulin-secreting beta cells to compensate. In type 2 diabetes, glucose is overproduced by the hepatocyte and is ineffectively metabolized by other organs. Impairments in the insulin signal transduction pathway appear to be critical lesions contributing to insulin resistance and type 2 diabetes.