Phenformin was administered to nine male subjects with fasting plasma glucose levels below 110 mg./lOO ml. and oral glucose tolerance levels ranging from clearly normal to mildly abnormal. Most of the subjects were slightly overweight, but weight was maintained constant throughout the study. Two weeks' administration of phenformin, 100 mg. per day, resulted in a fall in fasting plasma glucose levels both on a 45 per cent carbohydrate (mean change −4 per cent) and an 85 per cent carbohydrate diet (mean change −2 per cent). The glucose-lowering effect of the drug was not related to the initial glucose level, and the glucose-lowering effect of increased dietary carbohydrate was not altered by the drug. Both the total and the incremental glucose responses to oral glucose tended to be reduced by phenformin. Intravenous glucose tolerance (Kg) was improved by the drug, the mean change being similar to the mean change in oral glucose tolerance (−12 per cent). Basal insulin levels on both diets were lowered by phenformin (mean change −23 per cent) as were the total insulin responses to both oral and intravenous glucose (mean changes −18 per cent and −19 per cent respectively). It is suggested that phenformin's primary action is to enhance peripheral glucose assimilation, and that the changes in insulin secretion are secondary to this, having a counter-regulatory role in preventing profound hypoglycemia, and minimizing the changes in blood glucose in nondiabetic subjects. The absence of any drug effect on the acute insulin response to intravenous glucose (per cent basal) is consistent with the depressed insulin secretion being secondary to the drug's effect on glucose metabolism, rather than to a direct effect of phenformin on the pancreatic islets. The similar changes in the effect of the drug on oral and intravenous glucose tolerance suggest that impairment of intestinal glucose absorption is not an important effect of phenformin.