Insulin and glucagon regulate the expression and/or activity of a variety of proteins to maintain blood glucose within normal limits. A key target is the gene encoding phosphoenolpyruvate carboxykinase (PEPCK), which catalyzes the first committed step in hepatic gluconeogenesis. Acute regulation of PEPCK is achieved by modulating transcription of the gene, which is tightly regulated by cAMP (the mediator of glucagon and catecholamines), glucocorticoids and insulin. Normally, PEPCK expression is induced by glucagon, catecholamines and glucocorticoids during periods of fasting and in response to stress, but is dominantly inhibited by glucose-induced increases in insulin secretion upon feeding. The incomplete effectiveness of insulin action, whether due to intermittent insulin injection in type I diabetics or insulin resistance in type II diabetics, contributes to hyperglycemia and complications, resulting in damage to the eyes, nerves, kidneys and other organs over time. Thus, defining a molecular mechanism for insulin inhibition of PEPCK gene transcription has been a major goal of research in several labs, because it would allow the development of drugs to prevent episodic increases in circulating glucose in diabetics. Here, we review the main lines of investigation into this complex problem and the likely properties of an inhibitor. Any mechanism must account for the rapidity, specificity and dominance with which insulin is known to act in regulating PEPCK transcription. To date Foxo1 (FKHR) is the only transcription factor for which a complete path from the insulin receptor to gene regulation has been described. While this explains the regulation of some genes, such as IGFBP-1, Foxo1 appears not to play a requisite role in regulating PEPCK transcription. Investigation of cis-acting elements in the PEPCK promoter has shed considerable light on the mechanisms of activation by cAMP and glucocorticoids but has failed to identify a regulatory element that mediates insulin inhibition of transcription. This, together with evidence from analysis of the inducing mechanisms, has prompted us, and others, to investigate the possibility that insulin disrupts activation rather than independently promoting repression. Thus, we hypothesize that insulin-induced modification of a key transcription regulatory protein prevents an essential factor from participating in the induction process, leading to rapid but reversible inhibition, as is seen in animals. The ability to alter the sensitivity of a key transcription factor to improve insulin-regulated control of blood glucose would be a major improvement in the treatment of diabetes, a growing problem in the industrialized world.