Glucagon and/or the catecholamines elevate tissue cyclic adenylate (cAMP) and thereby change the activity of a number of metabolic processes, as studied in the isolated perfused rat liver. Insulin can lower cAMP in liver and thereby opposes these changes. In liver, in the basal state, there appears to be a substantial quantity of cAMP which is compartmentalized, unaffected by insulin and physiologically inactive. The hormone effects are exerted on a pool of “free cAMP,” and changes in the level of this pool control the minute-to-minute output of glucose and presumably effect rapid regulation of potassium fluxes and other processes. The level of cAMP in the active pool in the perfused liver is reflected by the efflux of the nucleotide into the medium. Not all insulin effects in liver or other tissues are mediated by a fall in cAMP.