Leptin treatment reverses hyperglycemia in animal models of poorly controlled type 1 diabetes (T1D), spurring great interest in the possibility of treating patients with this hormone. The antidiabetic effect of leptin has been postulated to occur through suppression of glucagon production, suppression of glucagon responsiveness or both; however, there does not appear to be a direct effect of leptin on the pancreatic alpha cell. Thus, the mechanisms responsible for the antidiabetic effect of leptin remain poorly understood. We quantified liver-specific rates of hepatic gluconeogenesis and substrate oxidation in conjunction with rates of whole-body acetate, glycerol and fatty acid turnover in three rat models of poorly controlled diabetes, including a model of diabetic ketoacidosis. We show that the higher rates of hepatic gluconeogenesis in all these models could be attributed to hypoleptinemia-induced activity of the hypothalamic-pituitary-adrenal (HPA) axis, resulting in higher rates of adipocyte lipolysis, hepatic conversion of glycerol to glucose through a substrate push mechanism and conversion of pyruvate to glucose through greater hepatic acetyl-CoA allosteric activation of pyruvate carboxylase flux. Notably, these effects could be dissociated from changes in plasma insulin and glucagon concentrations and hepatic gluconeogenic protein expression. All the altered systemic and hepatic metabolic fluxes could be mimicked by infusing rats with Intralipid or corticosterone and were corrected by leptin replacement. These data demonstrate a critical role for lipolysis and substrate delivery to the liver, secondary to hypoleptinemia and HPA axis activity, in promoting higher hepatic gluconeogenesis and hyperglycemia in poorly controlled diabetes.