We assessed glucose counterregulation during intensive insulin therapy in 20 patients with insulin-dependent diabetes mellitus (IDDM) by injecting therapeutic doses of regular insulin subcutaneously after overnight maintenance of euglycemia. As compared with nondiabetic controls matched for age and weight, 17 of the patients had more severe and more prolonged hypoglycemia (nadir, 42 +/- 2 in patients vs. 60 +/- 2 mg per deciliter in controls P less than 0.01; duration, 6.2 +/- 0.4 vs 2.1 +/- 0.6 hours, P less than 0.01). Most patients had decreased responses of several counterregulatory hormones. Marked rebound hyperglycemia (approximately equal to 300 mg per deciliter) ultimately developed in 11 patients. The only features distinguishing patients with rebound hyperglycemia from those without it were plasma free insulin concentrations during recovery from hypoglycemia (those with vs. those without, 7 +/- 1 vs. 22 +/- 2 microU per milliliter, P less than 0.01) and insulin-antibody binding (5 +/- 1 vs. 30 +/- 5 per cent, P less than 0.01). Rates of plasma glucose recovery from hypoglycemia were inversely correlated with plasma free insulin concentrations (r = -0.84, P less than 0.01); the latter in turn were directly correlated with insulin-antibody binding (r = 0.94, P less than 0.01). We conclude that many patients with IDDM have impaired glucose counterregulation due to multiple defects in counterregulatory-hormone secretion. This is associated with increased insulin-antibody binding, which prolongs the half-life of insulin. In such patients, intensive insulin therapy may be hazardous.