1. Glucagon stimulated gluconeogenesis from both [U-14C]lactate and [14C]xylitol in isolated perfused mouse liver. 2. Addition of cyclic AMP also stimulated gluconeogenesis from [U-14C]lactate. 3. Glucagon caused a rapid (2.5 min) 12-fold increase in hepatic cyclic AMP but not cyclic GMP concentration. 4. Glucagon caused a rapid and stable decrease in hepatic fructose 1,6-diphosphatase activity measured in vitro. 5. The results are interpreted to indicate that glucagon stimulates hepatic gluconeogenesis in mice via cyclic AMP by two different mechanisms: (a) increased substrate uptake (i.e. utilization) and (b) increased gluconeogenic efficiency (i.e. inhibition of alternate substrate fates).