The effect of glucagon (50 ng/kg/min) on arterial glycerol concentration and net splanchnic production of total ketones and glucose was studied after an overnight fast in four normal and five insulin-dependent diabetic men. Brachial artery and hepatic vein catheters were inserted and splanchnic blood flow determined using indocyanine green. The glucagon infusion resulted in a mean circulating plasma level of 4,420 pg/ml. In the normal subjects, the glucagon infusion resulted in stimulation of insulin secretion indicated by rising levels of immunoreactive insulin and C-peptide immunoreactivity. Arterial glycerol concentration (an index of lipolysis) declined markedly and net splanchnic total ketone production was virtually abolished. In contrast, the diabetic subjects secreted no insulin (no rise in C-peptide immunoreactivity) in response to glucagon. Arterial glycerol and net splanchnic total ketone production in these subjects rose significantly (P=<0.05) when compared with the results in four diabetics who received a saline infusion after undergoing the same catheterization procedure.Net splanchnic glucose production rose markedly during glucagon stimulation in the normals and diabetics despite the marked rise in insulin in the normals. Thus, the same level of circulating insulin which markedly suppressed lipolysis and ketogenesis in the normals failed to inhibit the glucagon-mediated increase in net splanchnic glucose production. It is concluded (a) that glucagon at high concentration is capable of stimulating lipolysis and ketogenesis in insulin-deficient diabetic man; (b) that insulin, mole for mole, has more antilipolytic activity in man than glucagon has lipolytic activity; and (c) that glucagon, on a molar basis, has greater stimulatory activity than insulin has inhibitory activity on hepatic glucose release.