Free fatty acids (FFA) have been shown to inhibit insulin suppression of endogenous glucose production (EGP). To determine whether this is the result of stimulation by FFA of gluconeogenesis (GNG) or glycogenolysis (GL) or a combination of both, we have determined rates of GNG and GL (with²H₂O) and EGP in 16 healthy nondiabetic volunteers (11 males, 5 females) during euglycemic-hyperinsulinemic (∼450 pM) clamping performed either with or without simultaneous intravenous infusion of lipid plus heparin. During insulin infusion, FFA decreased from 571 to 30 μmol/l (P < 0.001), EGP from 15.7 to 2.0 μmol · kg⁻¹ · min⁻¹(P < 0.01), GNG from 8.2 to 3.7 μmol · kg⁻¹ · min⁻¹(P < 0.05), and GL from 7.4 to −1.7 μmol · kg⁻¹ · min⁻¹(P < 0.02). During insulin plus lipid/heparin infusion, FFA increased from 499 to 1,247 μmol/l (P< 0.001). EGP decreased 64% less than during insulin alone (−5.1 ± 0.7 vs. −13.7 ± 3.4 μmol · kg⁻¹ · min⁻¹). The decrease in GNG was not significantly different from the decrease of GNG during insulin alone (−2.6 vs. −4.5 μmol · kg⁻¹ · min⁻¹, not significant). In contrast, GL decreased 66% less than during insulin alone (−3.1 vs. −9.2 μmol · kg⁻¹ · min⁻¹,P < 0.05). We conclude that insulin suppressed EGP by inhibiting GL more than GNG and that elevated plasma FFA levels attenuated the suppression of EGP by interfering with insulin suppression of GL.