We have shown previously in humans that insulin partly suppresses hepatic glucose production (HGP) by an extrahepatic (indirect) mechanism. In the present study, we investigated the role of free fatty acids (FFAs) in mediating the extrahepatic effects of insulin in humans and determined the extent to which insulin can regulate HGP by a non–FFA-mediated effect. Sixteen healthy men received an intravenous tolbutamide infusion for 3 h, and pancreatic insulin secretion was calculated by deconvolution of peripheral C-peptide levels. On a subsequent occasion, equimolar exogenous insulin was infused by peripheral vein. In both studies, glucose was clamped at euglycemia. We have previously validated this method and shown no independent insulin-like activity of tolbutamide. During the clamp, 9 of the 16 subjects received a low dose of heparin and Intralipid to prevent the insulin-induced suppression of FFAs, while 7 subjects received a high dose of heparin and Intralipid to raise FFAs ∼2.5-fold. In both the highand low-dose groups, peripheral insulin was higher and calculated portal insulin lower with peripheral versus portal insulin delivery. In the low-dose group, HGP decreased by 68.3 ±2.1% with portal insulin delivery and 64.7 ± 3.7% with peripheral insulin delivery (NS). In the high-dose group, HGP decreased by 58.0 ± 4.5% with portal insulin and 48.3 ± 5.0% with peripheral insulin ( P < 0.05). Four individuals who participated in the high-dose group underwent an additional peripheral insulin study in which the same dose of exogenous insulin was infused as in the high-dose group but in the absence of heparin and Intralipid. During this latter study, FFA levels declined by ∼90% during hyperinsulinemia, and HGP was suppressed by 71.8 ± 5.6%, which was a much greater suppression ( P < 0.01) than when FFA levels were raised in these subjects during the equivalent rate insulin infusion. In summary, the previously observed greater suppression of HGP with equimolar peripheral versus portal insulin is eliminated or reversed, depending on plasma FFA levels, if FFAs are prevented from decreasing, suggesting an important role of FFAs in mediating the extrahepatic effects of insulin on HGP. However, the effect of FFA clamping is relatively small with a significant degree of suppression of HGP (by ∼50%), which remains evenwhen FFAs are elevated above basal levels, suggesting that in the physiological range FFAs only partially influence the suppression of HGP in humans. This suggests that other mechanisms, most likely hepatic, dominate the acute insulin-induced suppression of glucose production.