The effect of restoration of normoglycemia by a novel sodium-dependent glucose transporter inhibitor (T-1095) on impaired hepatic glucose uptake was examined in 14-week-old Zucker diabetic fatty (ZDF) rats. The nontreated group exhibited persistent endogenous glucose production (EGP) despite marked hyperglycemia. Gluconeogenesis and glucose cycling (GC) were responsible for 46 and 51% of glucose-6-phosphatase (G6Pase) flux, respectively. Net incorporation of plasma glucose into hepatic glycogen was negligible. Glucokinase (GK) and its inhibitory protein, GK regulatory protein (GKRP), were colocalized in the cytoplasm of hepatocytes. At day 7 of drug administration, EGP was slightly reduced, but G6Pase flux and GC were markedly lower compared with the nontreated group. In this case, GK and GKRP were colocalized in the nuclei of hepatocytes. When plasma glucose and insulin levels were raised during a clamp, EGP was completely suppressed and GC, glycogen synthesis from plasma glucose, and the fractional contribution of plasma glucose to uridine diphosphoglucose flux were markedly increased. GK, but not GKRP, was translocated from the nucleus to the cytoplasm. Glucotoxicity may result in the blunted response of hepatic glucose flux to elevated plasma glucose and/or insulin associated with impaired regulation of GK by GKRP in ZDF rats.