Primary cultures of rat hepatocytes were used to investigate the regulation of glucokinase gene expression by insulin and glucagon. Insulin added in physiological concentrations to the culture medium causes de novo induction of glucokinase mRNA. The induced plateau is reached 4 to 8 h after insulin addition, and the mRNA level remains high as long as insulin is present. Comparison of the potencies of insulin, proinsulin, and insulin-like growth factor I in this system indicates that induction by insulin is mediated via the insulin receptor. The magnitude of the insulin effect is independent of the extracellular glucose concentration. Run-on transcription assays with isolated nuclei show that the mRNA build up depends primarily on a specific stimulation of glucokinase gene transcription. Glucagon added to hepatocytes together with a supramaximal concentration of insulin prevents induction of glucokinase mRNA in a dose-dependent manner. The inhibitory effect of glucagon is mimicked by 8-(4-chlorophenylthio)-cAMP. The effect of this agent has also been tested in hepatocytes first induced for maximal glucokinase gene transcription by culture with insulin alone for 12 h. The transcriptional activity of the gene as measured by run-on assay was completely turned off within 30 min after addition of the cyclic nucleotide. Under these conditions, glucokinase mRNA decays rapidly, with an apparent half-life of 45 min. The mRNA degradation rate was similarly rapid after insulin withdrawal from induced cells. Thus, a cAMP-mediated repression mechanism is a key aspect in the regulation of glucokinase gene transcription in the hepatocyte. Insulin may act by relieving the gene from repression.