The metabolic effects of metformin were compared to the effects of phenformin on isolated parenchymal liver cells from fed and fasted rats with ethanol or glycerol as the only substrate. Both biguanides caused a fall in the hepatic oxygen-consumption, in the cellular ATP-content and in the ATP/ADP-ratio. The lactate production and the concentration-ratios of lactate/pyruvate and of beta-hydroxybutyrate/acetoacetate rose. The production rate of ketone bodies remained unchanged. This response was the same whether the hepatocytes were from fed or fasted rats and whether glycerol or ethanol was substrate. Only quantitative differences in the response on the biguanides were detected. The effects of the biguanides were dose dependent. Phenformin was ten times more potent than metformin. The same holds for their therapeutical potency. The findings indicate inhibition of the oxidative phosphorylation by both biguanides resulting in reduction of the cytoplasmic and the mitochondrial redox potentials causing enhanced lactate production. It is concluded that metformin excerts the same effects as phenformin on the hepatic metabolism, when the concentration ratio is about ten to one. Both biguanides give rise to elevated lactate production. This effect is highly increased when ethanol is present.