The effect of a five day pretreatment with phenformin (3 X 50 mg daily) on hepatic metabolism was studied in six healthy volunteers. Arterial and hepatic venous concentrations of substrates and hepatic blood flow were estimated during a basal period and during a low-dose lactate infusion (0,03 mmol . kg-1 . min-1). The results have been compared with those obtained from untreated normal subjects in a previous study (16). During the baseline period arterial concentration of alanine and the hepatic venous concentration ratios of alanine: pyruvate and beta-hydroxybutyrate: acetoacetate were significantly increased with phenformin treatment, while the balances of carbon dioxide and glucose and the fractional extraction of alanine were decreased compared to the values obtained in untreated subjects. During lactate infusion mean arterial lactate concentration was significantly increased and hepatic lactate extraction was decreased compared to untreated persons under the same conditions. In the phenformin-treated group lactate infusion resulted in hepatic output of pyruvate and the hepatic glucose balance remained unchanged compared to baseline. Since the rate of hepatic blood flow was not increased during lactate infusion a significantly smaller glucose output and lactate uptake was obtained with phenformin. These findings support the present view that the hypoglycaemic effect of biguanides is due, at least in part, to inhibition of hepatic gluconeogenesis.