Glucose homeostasis is physiologically maintained by the balance between glucose production by the liver and glucose utilization by the peripheral tissues. Insulin controls hepatic glucose production and promotes glucose utilization by the skeletal muscle. In non-insulin-dependent diabetes mellitus (NIDDM), postabsorptive hepatic glucose production is increased and exhibits a positive correlation with fasting plasma glucose concentration. This increase in hepatic glucose production is the main cause of fasting hyperglycemia in NIDDM. Between the two processes by which the liver produces glucose (gluconeogenesis and glycogenolysis), gluconeogenesis appears to be drastically increased in NIDDM. The increase in gluconeogenesis accounts for most of the increased hepatic glucose production in this condition, and a positive correlation has been found in NIDDM subjects between the rates of gluconeogenesis and fasting plasma glucose concentration. Increased production of gluconeogenic precursors (lactate, alanine, glycerol) fuels this increased gluconeogenesis, but some type of intrahepatic mechanism is also present in NIDDM that increases the hepatic conversion of these substrates into glucose. Hyperglucagonemia and increased hepatic free fatty acid oxidation might be responsible for this increase hepatic gluconeogenic efficiency in NIDDM. Reduced suppression of hepatic glucose production after carbohydrate ingestion also plays an important role in the impairment in postprandial glucose homeostasis in NIDDM. In NIDDM subjects splanchnic extraction of an oral glucose load is not decreased, but hepatic glucose production is suppressed less than in nondiabetic subjects after the load. Residual hepatic glucose production after glucose ingestion is also correlated with fasting plasma glucose in NIDDM. Preliminary data suggest that in the postprandial state increased gluconeogenesis represents the primary mechanism responsible for impaired suppression of hepatic glucose production. Given the primary role of increase hepatic gluconeogenesis in the pathogenesis of hyperglycemia in NIDDM, development of new drugs aimed at correcting the factors that might cause increased gluconeogenesis (e.g., increased free fatty acid oxidation and hyperglucagonemia) might open the way for new form of treatment of this disorder.