Incubation of rat adipocytes with 1 microM glucagon plus adenosine deaminase (5 micrograms/ml) inhibited maximally insulin-stimulated 3-O-methyl-D-glucose (MeGlc) transport by approximately 70%, concomitant with 30% and 55% decreases in insulin binding and cellular ATP, respectively. In contrast, under conditions where cellular ATP levels are well preserved (i.e. high albumin concentration in the medium), the inhibition of transport was reduced to about 30%, but that of insulin binding was not. Because depletion of the cellular ATP level by more than 60% by metabolic inhibitors induced 40% or more inhibition of insulin-stimulated MeGlc transport, the greater inhibition of the transport with the low albumin concentration appears to be caused in part by the secondary effect of ATP loss. The relationship between the amount of cell-bound insulin and hormone-stimulated transport activity showed that glucagon does not modulate insulin action at the step of insulin binding to its receptors. Furthermore, glucagon suppressed insulin-stimulated MeGlc transport, mainly through an attenuation of the hormone-induced increase in maximum velocity. The data show that glucagon modulates the process of signal transduction of insulin action. However, the possibility that glucagon directly modulates the process of translocation or the intrinsic activity of the glucose transporters cannot be eliminated.