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Since the initial proposal of the glucose fatty acid cycle, considerable controversy has arisen concerning its physiologic significance in vivo. In the present study, we examined the effect of acute, physiologic elevations of FFA concentrations on glucose production and uptake in normal subjects under three controlled experimental conditions. In group A, plasma insulin levels were raised and maintained at approximately 100 microU/ml above base line by an insulin infusion, while holding plasma glucose at the fasting level by a variable glucose infusion. In group B, plasma glucose concentration was raised by 125 mg/100 ml and plasma insulin was clamped at approximately 50 microU/ml by a combined infusion of somatostatin and insulin. In group C, plasma glucose was raised by 200 mg/100 ml above the fasting level, while insulin secretion was inhibited with somatostatin and peripheral glucagon levels were replaced with a glucagon infusion (1 ng/min X kg). Each protocol was repeated in the same subject in combination with a lipid-heparin infusion designed to raise plasma FFA levels by 1.5-2.0 mumol/ml. With euglycemic hyperinsulinemia (study A), lipid infusion caused a significant inhibition of total glucose uptake (6.3 +/- 1.3 vs. 7.4 +/- 0.6 mg/min X kg, P less than 0.02). Endogenous glucose production (estimated by the [3-3H]glucose technique) was completely suppressed both with and without lipid infusion. With hyperglycemic hyperinsulinemia (study B), lipid infusion also induced a marked impairment in glucose utilization (6.2 +/- 1.1 vs. 9.8 +/- 1.9 mg/min X kg, P less than 0.05); endogenous glucose production was again completely inhibited despite the increase in FFA concentrations. Under both conditions (A and B), the percentage inhibition of glucose uptake by FFA was positively correlated with the total rate of glucose uptake (r = 0.69, P less than 0.01). In contrast, when hyperglycemia was associated with relative insulinopenia and hyperglucagonemia (study C), thus simulating a diabetic state, lipid infusion had no effect on glucose uptake (2.9 +/- 0.2 vs. 2.6 +/- 0.2 mg/min X kg) but markedly stimulated endogenous glucose production (1.4 +/- 0.5 vs. 0.5 +/- 0.4 mg/min X kg, P less than 0.005). Under the same conditions as study C, a glycerol infusion producing plasma glycerol levels similar to those achieved with lipid-heparin, enhanced endogenous glucose production (1.5 +/- 0.5 vs. 0.7 +/- 0.6 mg/min X kg, P less than 0.05). We conclude that, in the well-insulinized state raised FFA levels effectively compete with glucose for uptake by peripheral tissues, regardless of the presence of hyperglycemia. When insulin is deficient, on the other hand, elevated rates of lipolysis may contribute to hyperglycemia not by competition for fuel utilization, but through an enhancement of endogenous glucose output.