The action of glucagon in the liver is mediated by G-coupled receptors. To examine the role of glucagon in glucose homeostasis, we have generated mice in which the glucagon receptor was inactivated (GR^−/− mice). Blood glucose levels were somewhat reduced in GR^−/− mice relative to wild type, in both the fed and fasted state. Plasma insulin levels were not significantly affected. There was no significant effect on fasting plasma cholesterol or triglyceride levels associated with deletion of the glucagon receptor. Glucose tolerance, as assessed by an oral glucose tolerance test, improved. Plasma glucagon levels were strikingly elevated in both fed and fasted animals. Despite a total absence of glucagon receptors, these animals maintained near-normal glycemia and normal lipidemia, in the presence of circulating glucagon concentrations that were elevated by two orders of magnitude.