Previous studies have demonstrated that vanadate ions mimic many of the actions of insulin in in vitro systems. Also, vanadate administered to diabetic hyperglycemic rats lowers their blood glucose levels to normal values. In this study we demonstrate that vanadate inhibits glucose output in the isolated perfused rat liver. Glucose production was suppressed maximally (about 50% to 60%), on addition of extremely low vanadate ion concentrations (0.5 to 1 μmol/L). This concentration is about two log units lower than the vanadate ion concentrations that are required to activate hexose uptake and glucose metabolism in vitro and is within the range of endogenous intracellular vanadium concentration. Insulin had little or no effect in inhibiting hepatic glucose output in this experimental system. The effect of vanadate ions is rapid in onset and is not accompanied by any signs of liver toxicity as assessed by various criteria. In conclusion, the study indicates that (a) vanadate ions inhibits hepatic glucose output, maximally and at extremely low, nontoxic concentrations (ID50 = 0.7 ± 0.1 μmol/L). (b) The modulation action of the ion is fast and probably occurs at point(s) distal to the insulin receptor itself. (c) The liver participates in the process of maintaining euglycemia in diabetic rats receiving optimal doses of vanadate orally.