Vanadate mimics the metabolic actions of insulin. In diabetic rodents, vanadate also sensitizes peripheral tissues to insulin. We have analyzed whether this latter effect is brought about by a mechanism other than the known insulinomimetic actions of vanadium in vitro. We report that the levels of glucose 6-phosphate (G-6-P) in adipose, liver, and muscle of streptozotocin-treated (STZ)-hyperglycemic rats are 77, 50, and 58% of those in healthy control rats, respectively. Normoglycemia was induced by vanadium or insulin therapy or by phlorizin. Vanadate fully restored G-6-P in all three insulin-responsive peripheral tissues. Insulin did not restore G-6-P in muscle, and phlorizin was ineffective in adipose and muscle. Incubation of diabetic adipose explants with glucose and vanadate in vitro increased lipogenic capacity three- to fourfold (half-maximally effective dose = 11 +/- 1 microM vanadate). Lipogenic capacity was elevated when a threshold level of approximately 7.5 +/- 0.3 nmol G-6-P/g tissue was reached. In summary, 1) chronic hyperglycemia largely reduces intracellular G-6-P in all three insulin-responsive tissues; 2) vanadate therapy restores this deficiency, but insulin therapy does not restore G-6-P in muscle tissue; 3) induction of normoglycemia per se (i.e., by phlorizin) restores G-6-P in liver only; and 4) glucose and vanadate together elevate G-6-P in adipose explants in vitro and significantly restore lipogenic capacity above the threshold of G-6-P level. We propose that hyperglycemia-associated decrease in peripheral G-6-P is a major factor responsible for peripheral resistance to insulin. The mechanism by which vanadate increases peripheral tissue capacity to metabolize glucose and to respond to the hormone involves elevation of this hexose phosphate metabolite and the cellular consequences of this elevated level of G-6-P.