The present studies were undertaken to determine whether lipolysis was increased in non-insulin-dependent diabetes mellitus (NIDDM) and, if so, to assess the influence of increased glycerol availability on its conversion to glucose and its contribution to the increased gluconeogenesis found in this condition. For this purpose, we infused nine subjects with NIDDM and 16 age-, weight-matched nondiabetic volunteers with [2-3H] glucose and [U-14C] glycerol and measured their rates of glucose and glycerol appearance in plasma and their rates of glycerol incorporation into plasma glucose. The rate of glycerol appearance, an index of lipolysis, was increased 1.5-fold in NIDDM subjects (2.85 +/- 0.16 vs. 1.62 +/- 0.08 mumol/kg per min, P less than 0.001). Glycerol incorporation into plasma glucose was increased threefold in NIDDM subjects (1.13 +/- 1.10 vs. 0.36 +/- 0.02 mumol/kg per min, P less than 0.01) and accounted for twice as much of hepatic glucose output (6.0 +/- 0.5 vs. 3.0 +/- 0.2%, P less than 0.001). Moreover, the percent of glycerol turnover used for gluconeogenesis (77 +/- 6 vs. 44 +/- 2, P less than 0.001) was increased in NIDDM subjects and, for a given plasma glycerol concentration, glycerol gluconeogenesis was increased more than two-fold. The only experimental variable significantly correlated with the increased glycerol gluconeogenesis after taking glycerol availability into consideration was the plasma free fatty acid concentration (r = 0.80, P less than 0.01). We, therefore, conclude that lipolysis is increased in NIDDM and, although more glycerol is thus available, increased activity of the intrahepatic pathway for conversion of glycerol into glucose, due at least in part to increased plasma free fatty acids, is the predominant mechanism responsible for enhanced glycerol gluconeogenesis. Finally, although gluconeogenesis from glycerol in NIDDM is comparable to that of alanine and about one-fourth that of lactate is terms of overall flux into glucose, glycerol is probably the most important gluconeogenic precursor in NIDDM in terms of adding new carbons to the glucose pool.