Cultured rat hepatocytes were used to characterize the relationship between cellular glycogen content and the basal rate, as well as response to insulin of glycogen synthesis. Depending on the concentration of medium glucose, glycogen-depleted monolayers accumulated glycogen between 24 and 48 h of culture up to the fed in vivo level. Insulin at 100 nM stimulated glycogen deposition 20-fold at 1 mM and 1.5-fold at 50 mM glucose. The rate of further glycogen storage decreased with time and increasing glycogen content. In hepatocytes preincubated with 1-50 mM glucose during 24-48 h, short-term basal and insulin-dependent incorporation of 10 mM [14C]glucose into glycogen was inversely related to the actual cellular glycogen content. This was not due to different intracellular dilution of the label, since the specific radioactivity of UDP-glucose was similar in all groups. 125I-Insulin binding indicated that insulin receptors were also not involved in this phenomenon. An inverse relationship was also found between glycogen content and the stimulation of glycogen synthase I activity by insulin, whereas the basal activity of the enzyme was dissociated from the rate of incorporation of [14C]glucose. Basal net glycogen deposition at 10 mM glucose was also inversely related to cellular glycogen; however, no such relation was evident in the presence of insulin due to the overlapping inhibition of glycogenolysis. These studies suggest that the glycogen-mediated inhibition of the activation of glycogen synthase I is operative in the cultured hepatocyte and leads to an apparent inverse relationship between the actual glycogen content and basal as well as insulin-dependent glycogenesis.