Glycogen-targeting subunits of protein phosphatase-1 (PP-1) are scaffolding proteins that facilitate the regulation of key enzymes of glycogen metabolism by PP-1. In the current study, we have tested the effects of hepatic expression of G M ⌬C, a truncated version of the muscle-targeting subunit isoform, in rats rendered insulin-deficient via injection of a single moderate dose of streptozotocin (STZ). Three key findings emerged. First, G M ⌬C expression in liver was sufficient to fully normalize blood glucose levels (from 335 ؎ 31 mg/dl prior to viral injection to 109 ؎ 28 mg/dl 6 days after injection) and liver glycogen content in STZ-injected rats. Second, this normalization occurred despite very low levels of liver glucokinase expression in the insulin-deficient STZ-injected rats. Finally, the hyperphagia induced by STZ injection was completely reversed by G M ⌬C expression in liver. In contrast to these findings with G M ⌬C, overexpression of another targeting subunit, G L , in STZinjected rats caused a large increase in liver glycogen stores but only a transient decrease in food intake and blood glucose levels. The surprising demonstration of a glucose-lowering effect of G M ⌬C in the background of depressed hepatic glucokinase expression suggests that controlled stimulation of liver glycogen storage may be an effective mechanism for improving glucose homeostasis, even when normal pathways of glucose disposal are impaired.