The interaction of insulin and glucagon during infusion of somatostatin (SRIF), which suppresses secretion of these hormones, was investigated in normal, postabsorptive, concious dogs. Hepatic glucose output (production) and over-all glucose uptake by the tissues was measured with 3-3H-glucose, administered by a priming injection along with a constant infusion. Infusion of SRIF (1.5–5.0 μg/min) for 90 minutes resulted in a moderate hypoglycemia associated with a decrease in glucose production. In some animals glucose production and plasma glucose levels returned to normal before the end of SRIF infusion. Glucose uptake tended to follow plasma glucose levels. Upon termination of SRIF infusion, glucose production and uptake and plasma glucose increased sharply. Infusion of glucagon (1 μg./kg./hr.) along with SRIF (3.3 μg./min.) caused an exaggerated increase in glucose production and hyperglycemia over that of glucagon infusion alone. Infusion of a smaller dose of glucagon (0.2 μg./kg./hr.) for two hours produced only small increases in plasma glucose and glucose production; addition of SRIF during the third hour caused a significant increase in glucose production and plasma glucose. Addition of insulin (0.03 U./kg./hr.) to the glucagon infusion had little effect. However the further addition of SRIF failed to produce the marked increase in glucose production and hyperglycemia seen with glucagon-SRIF infusion. It is concluded that acute insulin deficiency produced during SRIF infusion makes the liver more sensitive to the effects of glucagon and that the response of the liver to glucagon and other hyperglycemic agents may be modulated by insulin.