Mitochondrial dysfunction and endoplasmic reticulum (ER) stress are considered critical components in the development of insulin resistance and Type 2 diabetes. However, understanding the molecular mechanisms underlying these individual disorders and how they are linked has been challenging. Here, we provide evidence that elevated levels of cytosolic free Ca(2+) due to mitochondrial dysfunction and concomitant activation of p38 mitogen activated protein kinase (MAPK) induce ER stress response in human liver sk-HepI cells. Blocking Ca(2+) release from mitochondria or ER using ruthenium red or ryanodine ameliorated the increase in expression of gluconeogenic enzymes due to mitochondrial dysfunction. Disturbance in mitochondrial function results in the activation of p38 MAPK and related transcription factors that are directly responsible for increased phosphoenolpyruvate carboxykinase (PEPCK) expression. In addition, abnormal activation of c-Jun N-terminal kinase (JNK) influences the PEPCK expression by affecting insulin signaling and Forkhead box O (Foxo) 1 activity. Alleviation of ER stress response using a chemical chaperone reduces p38 MAPK activation, as well as PEPCK overexpression, indicating that ER stress response strengthens mitochondrial stress-induced abnormalities. Our results demonstrate that mitochondrial dysfunction is directly linked to the ER stress response, and together, cause aberrant insulin signaling and an abnormal increase of hepatic gluconeogenesis.