The relative roles of insulin and glucose in the regulation of hepatic glycogen synthase and phosphorylase were studied in hepatocytes from fed rats. Elevation of extra-cellular glucose led to a rapid decrease in phosphorylase a activity followed by a slower increase in glycogen synthase I activity. A reciprocal and coordinate relationship between phosphorylase inactivation and synthase activation in response to glucose was observed; following initial glucose-induced inactivation of phosphorylase, there was a highly significant linear inverse relationship between residual phosphorylase activity and glycogen synthase activation. Insulin led to a further decrease in phosphorylase activity and a 30-50% additional increase in glycogen synthase activity over that caused by glucose. The effects of insulin required the presence of glucose and served to augment acute glucose stimulation of glycogen synthase and inhibition of phosphorylase. Insulin did not perturb the reciprocal and coordinate relationship between phosphorylase inactivation and synthase activation in response to glucose. The results suggest that the ability of insulin to activate hepatic glycogen synthase can be entirely accounted for by its ability to inactivate phosphorylase.