I nhibition of pancreatic glucagon secretion during hyperglycemia could be mediated by (a) glucose, (b) insulin, (c) somatostatin, or (d) glucose in conjunction with insulin. To determine the role of these factors in the mediation of glucagon suppression, we injected alloxan while clamping the arterial supply of the pancreatic splenic lobe of dogs, thus inducing insulin deficiency localized to the ventral lobe and avoiding hyperglycemia. Ventral lobe insulin, glucagon, and somatostatin outputs were then measured in response to a stepped IV glucose infusion. In control dogs glucagon suppression occurred at a glucose level of 150 mg/dl and somatostatin output increased at glucose greater than 250 mg/dl. In alloxan-treated dogs glucagon output was not suppressed nor did somatostatin output increase. We concluded that insulin was required in the mediation of glucagon suppression and somatostatin stimulation. Subsequently, we infused insulin at high rates directly into the artery that supplied the beta cell-deficient lobe in six alloxan-treated dogs. Insulin infusion alone did not cause suppression of glucagon or stimulation of somatostatin; however, insulin repletion during glucose infusions did restore the ability of hyperglycemia to suppress glucagon and stimulate somatostatin. We conclude that intra-islet insulin permits glucose to suppress glucagon secretion and stimulate somatostatin during hyperglycemia.