Adrenalectomized 24-h fasted rats lack the ability to synthesize and accumulate hepatic glycogen. In addition, the ability of liver glycogen synthase to respond to acute glucose administration is muted. The defect has been localized to the level of smooth endoplasmic reticulum-associated synthase phosphatase activity which is greatly reduced in adrenalectomized fasted rat liver. In vivo exposure to dexamethasone increases hepatic glucose output and hepatic glycogen synthesis and accumulation by 2-6 h after administration. Smooth endoplasmic reticulum synthase phosphatase activity is increased, and activation of glycogen synthase is restored. Ambient insulin concentrations are increased by steroid administration and appear to have a role in restoration of the ability to activate glycogen synthase, and consequently to restore the ability to synthesize and accumulate hepatic glycogen.