Insulin rapidly produced an increase in per cent of total heart glycogen synthase in the I form in fed rats. In fasted rats the response was diminished and delayed. In diabetic animals there was no response over the 15-min time period studied. Since synthase phosphatase activity is necessary for synthase D to I conversion, the phosphatase activity was determined in extracts from these groups of animals. In the fasted and diabetic rats phosphatase activity was less than one-half of that in fed animals. Administration of insulin to fasting animals increased synthase phosphatase activity to a level approaching that of fed animals by 15 min. In diabetic animals insulin also stimulated an increase in synthase phosphatase activity but 30 min were required for full activation. Insulin had no effect in normal fed animals. Insulin activation of synthase phosphatase activity in heart extracts from fasted animals was still present after Sephadex G-25 chromatography and ammonium sulfate precipitation. Thus insulin had induced a stable modification of the phosphatase itself or of its substrate synthase D rendering the latter a more favorable substrate for the reaction. A difference in sensitivity of the reaction to glycogen inhibition was present between fed and fasted animals. Increasing concentrations of glycogen had only a slight inhibitory effect in extracts from fed animals but considerably reduced activity in extracts from fasted animals. Insulin administration reduced the sensitivity of the phosphatase reaction to glycogen inhibition. This could explain, at least in part, the increased phosphatase activity noted in the insulin-treated, fasted rats since glycogen was routinely added to the homogenizing buffer.