Gluconeogenesis (GNG) is enhanced in type 2 diabetes. In experimental animals, insulin at high doses decreases the incorporation of labeled GNG precursors into plasma glucose. Whether physiological hyperinsulinemia has any effect on total GNG in humans has not been determined. We combined the insulin clamp with the (2)H(2)O technique to measure total GNG in 33 subjects with type 2 diabetes (BMI 29.0 +/- 0.6 kg/m(2), fasting plasma glucose 8.1 +/- 0.3 mmol/l) and in 9 nondiabetic BMI-matched subjects after 16 h of fasting and after euglycemic hyperinsulinemia. A primed-constant infusion of 6,6-(2)H-glucose was used to monitor endogenous glucose output (EGO); insulin (40 mU. min(-1). m(-2)) was then infused while clamping plasma glucose for 2 h (at 5.8 +/- 0.1 and 4.9 +/- 0.2 mmol/l for diabetic and control subjects, respectively). In the fasting state, EGO averaged 15.2 +/- 0.4 micromol. min(-1). kg(-1)(ffm) (62% from GNG) in diabetic subjects and 12.2 +/- 0.7 micromol. min(-1). kg(-1)(ffm) (55% from GNG) in control subjects (P < 0.05 or less for both fluxes). Glycogenolysis (EGO - GNG) was similar in the two groups (P = NS). During the last 40 min of the clamp, both EGO and GNG were significantly (P < 0.01 or less, compared with fasting) inhibited (EGO 7.1 +/- 0.9 and 3.6 +/- 0.5 and GNG 7.9 +/- 0.5 and 4.5 +/- 1.0 respectively) but remained significantly (P < 0.05) higher in diabetic subjects, whereas glycogenolysis was suppressed completely and equally in both groups. During hyperinsulinemia, GNG micromol. min(-1). kg(-1)(ffm) in diabetic and control subjects, was reciprocally related to plasma glucose clearance. In conclusion, physiological hyperinsulinemia suppresses GNG by approximately 20%, while completely blocking glycogenolysis. Resistance of GNG (to insulin suppression) and resistance of glucose uptake (to insulin stimulation) are coupled phenomena. In type 2 diabetes, the excess GNG of the fasting state is carried over to the insulinized state, thereby contributing to glucose overproduction under both conditions.