The hyperglycemic activity of pancreatic extracts was encountered some 80 yr ago during efforts to optimize methods for the purification of insulin. The hyperglycemic substance was named "glucagon," and it was subsequently determined that glucagon is a 29-amino acid peptide synthesized and released from pancreatic alpha-cells. This article begins with a brief overview of the discovery of glucagon and the contributions that somatostatin and a sensitive and selective assay for pancreatic (vs. gut) glucagon made to understanding the physiological and pathophysiological roles of glucagon. Studies utilizing these tools to establish the function of glucagon in normal nutrient homeostasis and to document a relative glucagon excess in type 2 diabetes mellitus (T2DM) and precursors thereof are then discussed. The evidence that glucagon excess contributes to the development and maintenance of fasting hyperglycemia and that failure to suppress glucagon secretion contributes to postprandial hyperglycemia is then reviewed. Although key human studies are emphasized, salient animal studies highlighting the importance of glucagon in normal and defective glucoregulation are also described. The past eight decades of research in this area have led to development of new therapeutic approaches to treating T2DM that have been shown to, or are expected to, improve glycemic control in patients with T2DM in part by improving alpha-cell function or by blocking glucagon action. Accordingly, this review ends with a discussion of the status and therapeutic potential of glucagon receptor antagonists, alpha-cell selective somatostatin agonists, glucagon-like peptide-1 agonists, and dipeptidyl peptidase-IV inhibitors. Our overall conclusions are that there is considerable evidence that relative hyperglucagonemia contributes to fasting and postprandial hyperglycemia in patients with T2DM, and there are several new and emerging pharmacotherapies that may improve glycemic control in part by ameliorating the hyperglycemic effects of this relative glucagon excess.