OBJECTIVE-Glucagon responses to hypoglycemia from islets transplanted in the liver are defective. To determine whether this defect is related to intrahepatic glycogen, islets from inbred Lewis rats were transplanted into the hepatic sinus (H group), peritoneal cavity (P group), omentum (O group), and kidney capsule (K group) of recipient Lewis rats previously rendered diabetic with streptozotocin (STZ). RESEARCH DESIGN AND METHODS-Glucagon responses to hypoglycemia were obtained before and after transplantation under fed conditions and after fasting for 16 h and 48 h to deplete liver glycogen. RESULTS-Glucagon (area under the curve) responses to hypoglycemia in the H group (8,839 ± 1,988 pg/ml per 90 min) were significantly less than in normal rats (40,777 ± 8,192; P < 0.01). Fasting significantly decreased hepatic glycogen levels. Glucagon responses in the H group were significantly larger after fasting (fed 8,839 ± 1,988 vs. 16-h fasting 24,715 ± 5,210 and 48-h fasting 29,639 ± 4,550; P < 0.01). Glucagon response in the H group decreased after refeeding (48-h fasting 29,639 ± 4,550 vs. refed 10,276 ± 2,750; P < 0.01). There was no difference in glucagon response to hypoglycemia between the H and the normal control group after fasting for 48 h (H 29,639 ± 4,550 vs. control 37,632 ± 5,335; P = NS). No intragroup differences were observed in the P, O, and K groups, or normal control and STZ groups, when comparing fed or fasting states. CONCLUSIONS-These data suggest that defective glucagon responses to hypoglycemia by intrahepatic islet α-cells is due to dominance of a suppressive signal caused by increased glucose flux and glucose levels within the liver secondary to increased glycogenolysis caused by systemic hypoglycemia.