Glucagon is a critical regulator of glucose homeostasis; however, mechanisms regulating glucagon action and α-cell function and number are incompletely understood. To elucidate the role of the hepatic glucagon receptor (Gcgr) in glucagon action, we generated mice with hepatocyte-specific deletion of the glucagon receptor. GcgrHep−/− mice exhibited reductions in fasting blood glucose and improvements in insulin sensitivity and glucose tolerance compared with wild-type controls, similar in magnitude to changes observed in Gcgr−/− mice. Despite preservation of islet Gcgr signaling, GcgrHep−/− mice developed hyperglucagonemia and α-cell hyperplasia. To investigate mechanisms by which signaling through the Gcgr regulates α-cell mass, wild-type islets were transplanted into Gcgr−/− or GcgrHep−/− mice. Wild-type islets beneath the renal capsule of Gcgr−/− or GcgrHep−/− mice exhibited an increased rate of α-cell proliferation and expansion of α-cell area, consistent with changes exhibited by endogenous α-cells in Gcgr−/− and GcgrHep−/− pancreata. These results suggest that a circulating factor generated after disruption of hepatic Gcgr signaling can increase α-cell proliferation independent of direct pancreatic input. Identification of novel factors regulating α-cell proliferation and mass may facilitate the generation and expansion of α-cells for transdifferentiation into β-cells and the treatment of diabetes.