Tolbutamide and carbutamide given orally to fasted rats cause a rise in the liver glycogen content 1(1/2) to 3(1/2) hr. after administration of the drugs. Glycogen accumulates preferentially in the right lobe. Subcutaneously injected tolbutamide has the same effect. Both sulphonylureas cause inhibition of glucose-6-phosphatase activity of rat liver homogenates in vitro, but at drug concentrations comparable with those found in plasma of treated patients the degree of inhibition is less than 10%. Livers from treated rats show normal glucose-6-phosphatase activity. The glucose uptake of the isolated rat diaphragm is unaffected by the sulphonylureas added in vitro. Diaphragms from treated rats show normal glucose uptake in the presence or absence of insulin. The inferences to be drawn from these results are discussed in the light of previous work. It is concluded that the sulphonylureas exert hypoglycaemic action by inhibiting glycogenolysis and it is suggested that they might do so by inhibiting release of glucagon from the pancreas.