In liver phosphoenolpyruvate carboxykinase (PCK) activity, protein and mRNA are localized predominantly in the periportal zone. The activation of the PCK gene by glucagon was studied in primary rat hepatocyte cultures under physiological arterial and venous oxygen tensions [16% and 8% (by vol.)]. PCK gene expression was monitored on the level of transcription, mRNA abundance and enzyme activity as well as enzyme synthesis and degradation. 1. Transcription of the PCK gene was increased by 10 nM glucagon maximally after 0.5 h; it reached nearly basal levels again after 2 h. The increase in transcription was 45% lower under 8% oxygen than under 16% oxygen. 2. PCK mRNA was maximally increased after 2 h under 16% oxygen and after 4 h under 8% oxygen; it subsequently declined to twice the basal values after 8 h. The maximal increase after 2 h was 50% lower under 8% oxygen than under 16% oxygen. 3. PCK enzyme activity was maximally increased after 4-6 h. The maximal enhancement after 4 h was 50% lower under 8% oxygen than under 16% oxygen. 4. The increase in PCK enzyme activity was due to an enhanced synthesis rate of PCK protein. The rate increased after 3 h was 35% lower under 8% oxygen than under 16% oxygen. 5. The degradation of PCK protein was equal under both oxygen tensions. The results show that in cultured rat hepatocytes the induction of PCK gene expression is modulated by physiological concentrations of oxygen. The modulation occurred at the level of gene transcription, mRNA abundance, enzyme protein synthesis and enzyme activity. The periportal to perivenous oxygen gradient could be the major factor responsible for the predominant expression of the PCK gene in the periportal zone.