The evanescence of glucagon's effect on glucose production (GP) is well documented, but it is unclear (1) whether this response involves both glycogenolysis and gluconeogenesis and (2) whether the liver becomes dependent on the increased glucagon level for the maintenance of a basal supply of glucose. To answer these questions, conscious overnight-fasted dogs were given somatostatin (0.8 microgram/kg . min) plus basal intraportal replacement amounts of insulin (273 microU/kg . min) and glucagon (0.65 ng/kg . min) for 2 h, after which the rate of glucagon infusion was increased fourfold for 3 h and then returned to basal for 1.5 h. GP was determined using a primed infusion of [3-3H]glucose, and gluconeogenesis (GNG) was estimated by determining the conversion rate of alanine and lactate to glucose. An increase in the plasma glucagon level from 55 to 206 pg/ml resulted in an initial 180% increase in GP, followed by a decline such that after 3 h of hyperglucagonemia GP was increased by only 41%. Contrary to overall GP, gluconeogenesis increased progressively throughout the hyperglucagonemic period, eventually reaching a rate 3 times basal. Restoration of the basal glucagon level (63 pg/ml) caused a marked decline in GP and GNG. In fact, GP fell to a level 29% below the initial control rate and consequently the plasma glucose level fell rapidly. The data suggest that (1) the downregulation of glucagon-stimulated GP is attributable to a decline in glycogenolysis and not gluconeogenesis, and (2) following adaptation to the hormone, the liver becomes dependent on the elevated glucagon concentration for the maintenance of basal glucose production.