The regulation of hepatic arginase (EC 3.5.3.1) activity was studied in diabetic rats fed ad libitum. Arginase activity in liver cytosol increased 2 to 3 days after injection of streptozotocin into rats and remained elevated (maximally 1.7-fold) 13 days postinjection. Radioimmunoassays indicated, however, that the amounts of immunoreactive arginase protein in livers of control and diabetic rats were similar. The specific activity of purified preparations of arginase from diabetic rats was approximately 1.5-fold higher than that from control rats. Manganese, a cofactor for arginase, was elevated by 4 days post-streptozotocin injection and remained elevated (maximally 1.6-fold) for at least 13 days. Most of the manganese in control and diabetic liver cytosols was associated with macromolecules and eluted with arginase activity upon gel filtration. These data establish that the enhanced arginase activity observed in diabetes is coincident with elevated cofactor concentration but not with elevated enzyme protein concentration.