Several studies have associated the presence of residual insulin secretion capability (also referred to as being C-peptide positive) with lower risk of insulin-induced hypoglycemia in patients with type 1 diabetes (T1D), although the reason is unclear. We tested the hypothesis that C-peptide infusion would enhance glucagon secretion in response to hyperinsulinemia during euglycemic and hypoglycemic conditions in dogs (5 male/4 female). After a 2-hour basal period, an intravenous (IV) infusion of insulin was started, and dextrose was infused to maintain euglycemia for 2 hours. At the same time, an IV infusion of either saline (SAL) or C-peptide (CPEP) was started. After this euglycemic period, the insulin and SAL/CPEP infusions were continued for another 2 hours, but the glucose was allowed to fall to approximately 50 mg/dL. In response to euglycemic-hyperinsulinemia, glucagon secretion decreased in SAL but remained unchanged from the basal period in CPEP condition. During hypoglycemia, glucagon secretion in CPEP was 2 times higher than SAL, and this increased net hepatic glucose output and reduced the amount of exogenous glucose required to maintain glycemia. These data suggest that the presence of C-peptide during IV insulin infusion can preserve glucagon secretion during euglycemia and enhance it during hypoglycemia, which could explain why T1D patients with residual insulin secretion are less susceptible to hypoglycemia.