Suboptimal glycemic control in individuals with type 1 and type 2 diabetes mellitus is associated with an increased risk of microvascular and macrovascular complications. Even brief periods of hyperglycemia increase the risk of complications. Fasting hyperglycemia is a phenomenon that has been observed in essentially all individuals with diabetes and may be due to dysregulation of the normal circadian hormonal patterns resulting in increased hepatic glucose output. Controlling hepatic glucose output and disposal is essential for effectively managing fasting hyperglycemia. Fasting hyperglycemia generally can be attributed to inadequate or inappropriate hepatic insulinization or the dawn phenomenon (fasting hyperglycemia occurring in the absence of antecedent hypoglycemia). Less commonly, the Somogyi effect (marked fasting hyperglycemia following antecedent hypoglycemia) can cause fasting hyperglycemia. Accurate diagnosis with overnight home blood glucose monitoring is important in developing an appropriate treatment strategy. Manipulation of the individual's diet or oral agent therapy may be all that is required in some individuals to reduce fasting hyperglycemia. Hepatic glucose output and disposal in the fasting state may be controlled via bedtime administration of either an intermediate-acting insulin such as NPH or a long-acting true basal insulin such as insulin glargine. Attention to fasting hyperglycemia coupled with appropriate individualization of treatment should improve the long-term outcome of individuals with type 1 and type 2 diabetes by reducing the risk of complications. Normalization of the fasting blood glucose, through whatever strategy, minimizes glucotoxicity and insulin resistance, profoundly influences daytime glycemic control, and profoundly reduces the risk of the complications of diabetes.