Glucagon stimulated adenylate cyclase activity some 21-fold in liver membranes from lean (Fa/Fa) and some 20-fold in membranes from obese (fa/fa) Zucker rats, with constants yielding half-maximal activation (Ka values) of 12·6 and 120·1 nmol/l respectively. Treatment of animals with the biguanide drug metformin (N′,N′-dimethylbiguanide) decreased the ability of glucagon to stimulate this enzyme to some 16-fold for both the lean and obese animals and reduced the Ka values for activation of this enzyme by glucagon to 6·3 and 60·9 nmol/l respectively. Insulin inhibited glucagon-stimulated adenylate cyclase activity by some 24% in liver membranes from lean animals and some 17% in liver membranes from obese animals, with constants yielding half-maximal inhibition (Ki values) of 110 and 160 nmol/l respectively. The ability of insulin to inhibit the adenylate cyclase activity, from obese but not lean animals, was attenuated when insulin concentrations over 5 nmol/l were employed. Treatment of animals with metformin profoundly altered the sensitivity of adenylate cyclase to inhibition by insulin, with inhibition being increased to some 32% using liver membranes from either lean or obese animals. Values of Ki for this inhibitory action of insulin were 520 and 500 nmol/l using membranes from the lean and obese animals respectively, and no reduction in the ability of insulin, at concentrations over 5 nmol/l, to inhibit adenylate cyclase activity was observed using membranes from obese animals. Metformin also changed the kinetics of inhibition of adenylate cyclase by insulin. These were apparently negatively co-operative, with Hill coefficients of 0·76 and 0·89 using membranes from the untreated lean and obese animals respectively, and positively co-operative, with Hill coefficients of 1·45 and 1·20 for the metformin-treated lean and obese animals respectively.