Hepatocytes were derived from 2-3-day streptozotocin-diabetic rats and maintained in culture for up to 3 days. Compared with similar cultures from normal animals, these hepatocytes secreted less very-low-density-lipoprotein (VLDL) triacylglycerol, but the decrease in the secretion of VLDL non-esterified and esterified cholesterol was not so pronounced. This resulted in the secretion of relatively cholesterol-rich VLDL particles by the diabetic hepatocytes. Addition of insulin for a relatively short period (24 h) further decreased the low rates of VLDL triacylglycerol secretion from the diabetic hepatocytes. The secretion of VLDL esterified and non-esterified cholesterol also declined. These changes occurred irrespective of whether or not exogenous fatty acids were present in the culture medium. Little or no inhibitory effect of insulin was observed after longer-term (24-48 h) exposure to the hormone. Both dexamethasone and a mixture of lipogenic precursors (lactate plus pyruvate) stimulated VLDL triacylglycerol and cholesterol secretion, but not to the levels observed in hepatocytes from normal animals. The low rate of hepatic VLDL secretion in diabetes contrasts with the increase in whole-body VLDL production rate. This suggests that the intestine is a major source of plasma VLDL in insulin-deficient diabetes.