The contribution of gluconeogenesis (GNG) to endogenous glucose output (EGO) in type 2 diabetes is controversial. Little information is available on the separate influence of obesity on GNG. We measured percent GNG (by the 2 H 2 O technique) and EGO (by 6,6-[ 2 H]glucose) in 37 type 2 diabetic subjects (9 lean and 28 obese, mean fasting plasma glucose [FPG] 8.3 ± 0.3 mmol/l) and 18 control subjects (6 lean and 12 obese) after a 15-h fast. Percent GNG averaged 47 ± 5% in lean control subjects and was significantly increased in association with both obesity (P < 0.01) and diabetes (P = 0.004). By multivariate analysis, percent GNG was independently associated with BMI (partial r = 0.27, P < 0.05, with a predicted increase of 0.9% per BMI unit) and FPG (partial r = 0.44, P = 0.0009, with a predicted increase of 2.7% per mmol/l of FPG). In contrast, EGO was increased in both lean and obese diabetic subjects (15.6 ± 0.5 µmol · min -1 · kg -1 of fat-free mass, n = 37, P = 0.002) but not in obese nondiabetic control subjects (13.1 ± 0.7, NS) as compared with lean control subjects (12.4 ± 1.4). Consequently, gluconeogenic flux (percent GNG ؋ EGO) was increased in obesity (P = 0.01) and markedly elevated in diabetic subjects (P = 0.0004), whereas glycogenolytic flux was reduced only in association with obesity (P = 0.05). Fasting plasma glucagon levels were significantly increased in diabetic subjects (P < 0.05) and positively related to EGO, whereas plasma insulin was higher in obese control subjects than lean control subjects (P = 0.05) and unrelated to measured glucose fluxes. We conclude that the percent contribution of GNG to glucose release after a 15-h fast is independently and quantitatively related to the degree of overweight and the severity of fasting hyperglycemia. In obese individuals, reduced glycogenolysis ensures a normal rate of glucose output. In diabetic individuals, hyperglucagonemia contributes to inappropriately elevated rates of glucose output from both GNG and glycogenolysis. Diabetes 49:1367-1373, 2000 P atients with type 2 diabetes typically show an increase in endogenous glucose output (EGO) (1-3). Several observations indicate that gluconeogenesis (GNG) is increased in type 2 diabetes. First, there is an increased protein turnover and hence release of gluconeogenic amino acids. Second, in obese patients with type 2 diabetes, the increased fat mass and rate of lipolysis contribute substrate (glycerol) (4,5) and activation (free fatty acids) (6,7) for GNG. Third, the net uptake of all gluconeogenic precursor substrates by the liver is increased. Using splanchnic catheterization, Felig et al. (8) estimated that in diabetic subjects, conversion into glucose of gluconeogenic precursors could represent 30% of splanchnic glucose output versus 20% in lean nondiabetic subjects (8). Although net splanchnic substrate uptake cannot account for the whole of GNG, this finding is nevertheless compatible with enhanced GNG in diabetes. Finally, tracer studies have shown that in obese type 2 diabetic patients...