Defective insulin secretion plays a crucial role in insulin-dependent (Type 1) and non-insulin-dependent (Type 2) diabetes mellitus as well as in many secondary forms of the disease. Glucagon is a potent stimulus for the islet beta-cell, and intravenous bolus injection of 1 mg glucagon has been widely used to assess endogenous insulin secretion for clinical or research purposes. Plasma C-peptide levels (less commonly insulin) are usually measured immediately before and 6 min after glucagon injection. The C-peptide response to glucagon is well-correlated with the beta-cell response to mixed meals or other stimuli commonly used to characterize endogenous insulin secretion (oral or intravenous glucose, standard meals, arginine, etc.) and has the advantage of shorter duration and simple standardization. The glucagon test shows good intra-subject reproducibility, although in diabetic patients it may be influenced by variable prevailing blood glucose levels. Several applications of the glucagon test have been developed. In Type 1 diabetes, the glucagon test has been used to discriminate between patients with and without residual insulin secretion. This can be especially important during the first few months, or even years, following initiation of insulin therapy when attempts to stop the immunological destruction of the beta-cell are made. Assessment of endogenous insulin secretion is also important after pancreas or islet transplantation. In patients with Type 2 diabetes mellitus, in which residual endogenous insulin secretion is common, characterization of the disease may help in the choice of therapy for the individual patient (insulin, sulphonylureas or combined therapy). Thus, the glucagon test is a simple, reliable and useful tool for clinical evaluation of diabetes mellitus.