To determine whether the hepatic insulin resistance of obesity and type 2 diabetes is due to impaired insulininduced suppression of glycogenolysis as well as gluconeogenesis, 10 lean nondiabetic, 10 obese nondiabetic, and 11 obese type 2 diabetic subjects were studied after an overnight fast and during a hyperinsulinemic-euglycemic clamp. Gluconeogenesis and glycogenolysis were measured using the deuterated water method. Before the clamp, when glucose and insulin concentrations differed among the three groups, gluconeogenesis was higher in the diabetic than in the obese nondiabetic subjects (P < 0.05) and glycogenolysis was higher in the diabetic than in the lean nondiabetic subjects (P < 0.05). During the clamp, when glucose and insulin concentrations were matched and glucagon concentrations were suppressed, both glycogenolysis and gluconeogenesis were higher (P < 0.01) in the diabetic versus the obese and lean nondiabetic subjects. Furthermore, glycogenolysis and gluconeogenesis were higher (P < 0.01) in the obese than in the lean nondiabetic subjects. Plasma free fatty acid concentrations correlated (P < 0.001) with glucose production and gluconeogenesis both before and during the clamp and with glycogenolysis during the clamp (P < 0.01). We concluded that defects in the regulation of glycogenolysis as well as gluconeogenesis cause hepatic insulin resistance in obese nondiabetic and type 2 diabetic humans. Diabetes 54: [1942][1943][1944][1945][1946][1947][1948] 2005 T ype 2 diabetes is characterized by both fasting and postprandial hyperglycemia. Numerous studies have established that glucose production in people with type 2 diabetes is either elevated or not appropriate for the prevailing glucose and insulin concentrations (1-8). The cause(s) of these inappropriately elevated rates of glucose production remains an area of active investigation. A series of studies have shown that gluconeogenesis, whether measured with magnetic resonance spectroscopy (7) or the deuterated water method, is increased in people with type 2 diabetes (2,9 -13). On the other hand, rates of glycogenolysis have been reported to not differ in diabetic and nondiabetic individuals (2,9,10,12). However, because both hyperglycemia and hyperinsulinemia are potent inhibitors of glycogenolysis (14 -17), equal rates of glycogenolysis, despite higher glucose and insulin concentrations in diabetic subjects, imply abnormal regulation of the glycogenolytic as well as the gluconeogenic pathway.We recently confirmed this supposition (11) by demonstrating that the contribution of glycogenolysis to endogenous glucose production (henceforth referred to as glycogenolysis) was fully suppressed in nondiabetic subjects when insulin concentrations were clamped at levels slightly above basal and glucose concentrations were raised to levels typically observed in people with type 2 diabetes (i.e., ϳ11 mmol/l). In contrast, glycogenolysis persisted in people with mild (e.g., fasting glucose ϳ8 mmol/l) or severe (e.g., fasting glucose ϳ12 mmol/l) diabetes who...