Recent evidence indicates that glucagon is important in the physiological regulation of hepatic glucose and ketone body metabolism. It is the major acute glucocounterregulatory hormone in man and is one of several hormones with actions antagonistic to those of insulin that can exacerbate the metabolic consequences of insulin deficiency. The secretion of glucagon is governed by both local (e.g., somatostatin) and systemic factors (e.g., substrates and catecholamines), the most important of which is the plasma glucose concentration. Plasma glucagon immunoreactivity is heterogeneous, and only a minor portion is biologically active-an important consideration in the interpretation of results based on radioimmunoassay data. The liver and kidney are primarily responsible for the catabolism of glucagon. Consequently, peripheral venous glucagon concentrations may not necessarily reflect concentrations of glucagon delivered to its target organ, the liver, via the portal vein. Liver and renal disease may increase circulating plasma glucagon concentrations and alter the composition of plasma glucagon immunoreactivity. A cell function is abnormal in human diabetes and is characterized by relative or absolute fasting hyperglucagonemia, excessive increases in plasma glucagon following meals, and lack of appropriate responses to changes in plasma glucose concentrations. The exact extend to which these abnormalities are the result of insulin deficiency and an intrinsic A cell defect remains to be determined. A cell dysfunction contributes to the fasting hyperglycemia and hyperketonemia in diabetes and probably also to postprandial hyperglycemia. Of all the hormones antagonistic to insulin, glucagon seems to be the most important in exacerbating the metabolic consequences of insulin deficiency.