The terminal step in hepatic gluconeogenesis is catalyzed by glucose-6- phosphatase, an enzyme activity residing in the endoplasmic reticulum and consisting of a catalytic subunit (glucose-6-phosphatase (G6Pase)) and putative accessory transport proteins. We show that Zucker diabetic fatty rats (fa/fa), which are known to exhibit impaired suppression of hepatic glucose output, have 2.4-fold more glucose-6-phosphatase activity in liver than lean controls. To define the potential contribution of increased hepatic G6Pase to development of diabetes, we infused recombinant adenoviruses containing the G6Pase cDNA (AdCMV-G6Pase) or the β-galactosidase gene into normal rats. Animals were studied by one of three protocols as follows: protocol 1, fed ad libitum for 7 days; protocol 2, fed ad libitum for 5 days, fasted overnight, and subjected to an oral glucose tolerance test; protocol 3, fed ad libitum for 4 days, fasted for 48 h, subjected to oral glucose tolerance test, and then allowed to refeed overnight. Hepatic glucose-6- phosphatase enzymatic activity was increased by 1.6-3-fold in microsomes isolated from AdCMV-G6Pase-treated animals in all three protocols, and the resultant metabolic profile was similar in each case. AdCMV-G6Pase-treated animals exhibited several of the abnormalities associated with early stage non-insulin-dependent diabetes mellitus, including glucose intolerance, hyperinsulinemia, decreased hepatic glycogen content, and increased peripheral (muscle) triglyceride stores. These animals also exhibited significant decreases in circulating free fatty acids and triglycerides, changes not normally associated with the disease. Our studies show that overexpression of G6Pase in liver is sufficient to perturb whole animal glucose and lipid homeostasis, possibly contributing to the development of metabolic abnormalities associated with diabetes.