Troglitazone is an antidiabetic agent that improves the ability of adipocytes to store triglycerides by enhancing their insulin sensitivity. Although potent in insulin-resistant states, the effect of troglitazone on lipid and glucose turnover in normal animals has not been assessed. Euglycemic clamps were performed as an insulin dose response in normal mongrel dogs (n = 6). Somatostatin was infused without hormone replacement (zero insulin) for 90 min. Insulin was then either portally replaced (1.8 pmol x min(-1) x kg(-1), overreplaced (5.4 pmol x min(-1) x kg(-1)), or overreplaced peripherally to match the systemic levels of the portal overreplacement dose (2.3 pmol x min(-1) x kg(-1)) for 180 min. A total of 600 mg troglitazone was then given orally each day for 3 weeks and continued throughout a second experimental phase, at which point the euglycemic clamps were repeated. In concordance with previous studies, endogenous glucose production (EGP) was similar whether insulin was delivered portally or peripherally, both before and during troglitazone treatment. Although free fatty acids (FFAs) at zero insulin were not affected, there was a leftward shift of the insulin-FFA dose response curve secondary to a suppression of FFA release into plasma. EGP was paradoxically elevated by troglitazone treatment because of an elevation of both gluconeogenesis and glycogenolysis. In conclusion, troglitazone reduced hepatic sensitivity to FFAs. Because EGP is a primary determinant of fasting blood glucose, we hypothesize that a protective mechanism exists in normal animals, preventing hypoglycemia during insulin sensitization with troglitazone.