Insulin integrates hepatic glucose and lipid metabolism, directing nutrients to storage as glycogen and triglyceride. In type 2 diabetes, levels of the former are low and the latter are exaggerated, posing a pathophysiologic and therapeutic conundrum. A branching model of insulin signalling, with FoxO1 presiding over glucose production and Srebp-1c regulating lipogenesis, provides a potential explanation. Here we illustrate an alternative mechanism that integrates glucose production and lipogenesis under the unifying control of FoxO. Liver-specific ablation of three FoxOs (L-FoxO1,3,4) prevents the induction of glucose-6-phosphatase and the repression of glucokinase during fasting, thus increasing lipogenesis at the expense of glucose production. We document a similar pattern in the early phases of diet-induced insulin resistance, and propose that FoxOs are required to enable the liver to direct nutritionally derived carbons to glucose versus lipid metabolism. Our data underscore the heterogeneity of hepatic insulin resistance during progression from the metabolic syndrome to overt diabetes, and the conceptual challenge of designing therapies that curtail glucose production without promoting hepatic lipid accumulation.