Pancreatectomized rats hypophysectomized for one week or longer developed ketosis when given dexamethasone and growth hormone in amounts that were relatively inactive when administered alone. Growth hormone could be replaced by other lipolytic hormones, such as adrenocortico-trophic hormone (ACTH) and thyroxine. When fasted hypophysectomized rats were made acutely diabetic by injection of mannoheptulose, the plasma concentrations of glucose, ketone bodies, free fatty acids (FFA) and glycerol were increased; injection of growth hormone and dexamethasone further increased the concentrations of these plasma constituents. Injection of these hormones increased lipolysis and decreased glucose metabolism, in vitro, by adipose tissue of mannoheptulose-treated hypophysectomized rats. Uptake of FFA and ketogenesis by perfused livers of fasted hypophysectomized rats were directly related to the concentration of FFA in the perfusing fluid. Growth hormone and glucocorticoid did not have an effect on FFA uptake and ketogenesis in the liver. It is concluded that lipolytic and glucocorticoid hormones induce diabetic ketosis through their actions on adipose tissue. Lipolytic hormones stimulate lipolysis in adipose tissue while glucocorticoid limits, in the absence of insulin, re-esterification of FFA by suppressing the metabolism of glucose. The resultant increased release of FFA to the blood augments, in turn, the concentration of FFA in plasma, the uptake of FFA by the liver, and the formation of ketone bodies in the liver.