Blood glucose levels are maintained by the balance between glucose uptake by peripheral tissues and glucose secretion by the liver. Gluconeogenesis is strongly stimulated during fasting and is aberrantly activated in diabetes mellitus. Here we show that the transcriptional coactivator PGC-1 is strongly induced in liver in fasting mice and in three mouse models of insulin action deficiency: streptozotocin-induced diabetes, ob/ob genotype and liver insulin-receptor knockout. PGC-1 is induced synergistically in primary liver cultures by cyclic AMP and glucocorticoids. Adenoviral-mediated expression of PGC-1 in hepatocytes in culture or in vivo strongly activates an entire programme of key gluconeogenic enzymes, including phosphoenolpyruvate carboxykinase (PEPCK) and glucose-6-phosphatase, leading to increased glucose output. Full transcriptional activation of the PEPCK promoter requires coactivation of the glucocorticoid receptor and the liver-enriched transcription factor HNF-4alpha (hepatic nuclear factor-4alpha) by PGC-1. These results implicate PGC-1 as a key modulator of hepatic gluconeogenesis and as a central target of the insulin-cAMP axis in liver.